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How the budget will impact property buying and selling

·6-min read
How the budget will impact property buying and selling
UK chancellor Rishi Sunak said the government would be 'investing more in housing and home ownership.' Photo: Matt Crossick/Empics

Buyers and sellers had hoped chancellor Rishi Sunak would use the Autumn Budget to fix the housing market, but instead, his statement was pretty light on the property front.

Some of the current housing sector issues are fallout from the chancellor’s stamp duty holiday, launched to try and get the property market moving once it reopened after the first national lockdown.

While the tax break helped many buyers step onto, and climb up, the property ladder, it has also fuelled a sales boom, with house prices pushed up to record highs. At the same time, it has created distortion in the market and resulted in demand far outstripping supply.

Sunak said the government would be “investing more in housing and home ownership.” He plans to put £24bn ($32.9bn) into housing, including £11.5bn to build 180,000 affordable homes.

However, questions are being asked as to whether the Sunak’s measures are actually going to address the housing crisis, and whether the government will deliver on its promise.

Marc von Grundherr, director of estate agent, Benham and Reeves, said: “Disappointing to see such a brief mention for the UK property market. The chancellor has chosen to give the sector a bit of the cold shoulder with just a handful of headline figures.”

Here we take a closer look.

Watch: What are the key takeaways from Rishi's budget?

Cash investment in affordable homes

Sunak announced an investment of £11.5bn to help build up to 180,000 affordable homes, with 65% of the funding for homes outside London. Brownfield sites have been targeted for development.

While the move has been welcomed, some are sceptical about how this will play out.

Ian Biggs from Coventry Building Society said: “We welcome the chancellor’s commitment to building 180,000 new affordable homes by 2025/26. It’s a start, but we’ve seen promises like this before. An increase in housing supply will be vital to keep the market moving — and get more people on the housing ladder.”

Evie John, director at PwC, added: “Any increase to the supply of homes is welcome, particularly when there is a commitment to affordability and a sustainable approach to development. While an additional 180,000 new homes does leave the government with some way short of its ambitions, this is a step forward.”

Brownfield development

Sunak announced that £1.8bn will go towards working on bringing 1,500 hectares of brownfield land into use.

Hugh Gibbs, co-founder of property company, SearchLand, said: “This country doesn’t have enough homes. The UK’s affordability crisis has been building for decades and there is an urgent need to deliver more high-quality affordable housing, but the pace of construction is failing to meet demand. 

Read more: Sunak cuts draft beer duty in most radical reforms in 100 years

"As such, the chancellor’s funding pledge to encourage brownfield residential redevelopment across more than 100 areas is a positive step in the right direction, but there needs to be a concerted effort from the government to ensure the homes are fit for purpose and affordable for those in need."


Sunak also reiterated the commitment to a £5bn fund to remove unsafe cladding from the highest-risk buildings. This is to be partly funded by a 4% levy on developers with profits over £25m, to create a £5bn pot to address the issue.

Myron Jobson from Interactive Investor said: “Leaseholders who purchased their homes in flat blocks affected by dangerous cladding can breathe a little easier following this announcement. Many faced being saddled with huge costs for remedial works or fire patrols to address a problem that was not of their making. 

"Thousands of people trying to sell flats in clad blocks have discovered that there is little to no interest in their property because of the crisis — and even if a buyer is found, some mortgage providers have viewed flats with claddings unfavourably. Some may argue that more money is needed to fully address the issue."

Watch: Budget 2021: Rishi Sunak unveils tax cuts and benefits boost as he warns of 'challenging' months ahead

Stamp duty

No further reforms to stamp duty were announced. Some feel the chancellor missed a big opportunity to overhaul the current system.

Biggs said: “The Treasury has had more than a year of bumper returns while the stamp duty holiday was in place, raking in £13.5bn in the process, and yet there don’t seem to be any lessons learned. 

Read more: Sunak resets UK's spending focus for a post-COVID economy

"We still think there’s a smarter way to tax property purchases in a way that maximises returns to the taxman, reduces the financial burden on buyers and, as the Green Finance Institute proposed, incentivises much-needed green improvements to homes across the country. People looking to get on the property ladder — or to move home in the next year will be disappointed the chancellor offered them nothing of substance in this budget."

One idea that has been mooted, is the abolition of the lowest threshold — 2% on properties costing more than £125,000.

Nitesh Patel from Yorkshire Building Society said: "This would make it easier for homeowners at the lower end of the ladder to trade up to a larger home and would increase the supply of existing housing available for first time buyers."

Lack of any incentives to buy

It is perhaps telling that Sunak didn’t announce any incentives aimed at buyers.

Iain McKenzie from The Guild of Property Professionals, said: "This tells us that the government has high hopes for 2022 and that it expects property sales to remain buoyant in the months ahead."

Capital Gains Tax

One noticeable absence from Sunak’s Budget was Capital Gains Tax (CGT). 

In fact, the only mention was in the budget document — and not in the announcement as many had expected.

Read more: What Sunak's budget means for household finances

Jobson said: "From 27 October 2021, the deadline for residents to report and pay CGT after selling UK residential property will increase from 30 days after the completion date to 60 days. For non-UK residents disposing of property in the UK, this deadline will also increase from 30 to 60 days. This will ensure taxpayers have sufficient time to report and pay CGT, as recommended by the Office of Tax Simplification (OTS)."

Proposals to increase CGT to align with income tax, made by the OTS last year, remain unrealised for now.

Nicky Stevenson from estate agent group, Fine & Country, said: “Millions of homeowners across the country will be pleased to hear the chancellor has resisted calls to increase CGT.”

Watch: How much money do I need to buy a house?

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