Impact of Budget 2020 on property and housing
Here are the key property and housing plans unveiled by the Chancellor Rishi Sunak’s 2020 Budget.
Homebuyers have been left disappointed after the long-awaited reform to stamp duty for UK residents, did not materialise. There had been speculation that the Chancellor would tweak the tax to help stimulate the housing market.
It remains to be seen whether or not this will deter current home buying decisions as borrowing costs are back down to the lowest level ever following the Bank of England’s cut to interest rates. What started as a temporary, extraordinary period of low interest rates is basically now locked in for the long term.
• A 2% stamp duty surcharge for non-UK residents from April 2021.
Affordable housing and homelessness
• An extension of the Affordable Homes Programme with 200,000 new affordable homes. A new multi-year settlement of £12 billion and £400 million for Mayoral Combined Authorities and local areas to establish housing on brownfield land.
• A £650 million rough sleepers fund will support people into permanent accommodation.
• A £1 billion Building Safety Fund supporting the removal of unsafe combustible cladding. The fund will cover all types of cladding, not just aluminium composite material, on private and social buildings 18 metres and above. The funding is additional to the £600 million already allocated last year.
• £120 million to be allocated for repairing damage caused by winter floods. A further £200 million will go directly to local communities experiencing repeated flooding for flood resilience. £5.2 billion investment in flood defences over the next six years.
Communications and infrastructure
• £27 billion will be spent on upgrading strategic roads and £2.5 billion on fixing potholes.
• £5 billion will go towards the rollout of gigabit-capable broadband in the hardest to reach areas.
Combating the spread of COVID-19 took a prominent place in the speech. These measures are not specific to housing, but may benefit tenants and landlords:
• Statutory Sick Pay (SSP) will be available from Day One (instead of Day Four) of any sick leave.
• SSP will be available for anyone advised to self-isolate, fit/sick notes will be available from NHS 111 with no need to travel to a doctor.
• Those on Contributory Employment Support Allowance can claim from day one instead of day eight.
• Benefit claimants will not be required to attend Job Centres in person to claim, this can be done over the phone or online.
• A £500 million hardship fund will be available for distribution via local authorities.
• National Living wage 6.2 per cent increase – to reach 2/3 of median earnings by 2024.
• National Insurance threshold up from £8,632 to £9,500 from 2020/21 – giving 31 million people a tax cut, saving a typical employee £104.
A targeted relief for homeowners who live in properties that are larger than their needs, would have helped to encourage homeowners to downsize, freeing them up for families. We will now have to wait for the Autumn Statement to see if stamp duty gets the attention it deserves.