What does the Budget mean for property?
The Chancellor may have ‘sat on his hands’ when it came to property in his 2017 Spring Budget. But that doesn’t mean you have to.
It’s safe to say that Chancellor, Philip Hammond’s Spring Budget is unlikely to go down in the history books. But with so much going on already in the UK housing market, it’s a great opportunity to take stock.
Here are some key pointers…whatever your relationship with property.
“I’m saving for my first home…”
Desperately looking for somewhere to stash your cash? The Chancellor presented an additional option in his Budget speech by confirming the launch of new NS&I Bond.
Available from April this year, the account will pay a fixed rate of 2.2% on deposits of up to £3,000. The maximum total interest available on the account is £202 before any tax is accounted for.
Thankfully, deposit savers have alternatives.
- The Lifetime ISA, which can be used for first home OR retirement savings, is set to launch as planned on 6 April. For every £1 you save into the account, the Government will contribute another 25p and it’s all tax-free. The annual contribution limit is £4,000 which puts the maximum Government bonus available at £1,000 a year. Get the lowdown on the accounts with our Q&A.
- The Help to Buy ISA, which launched in December 2015, allows you to save up to £200 a month into the account (in addition to an opening £1,000) and earn interest tax-free. The Government will then top up your pot with a tax-free 25% bonus (maximum £3,000) when you complete on the purchase of your first home. Find out about the account’s pros and cons.
- Help to Save, which is still set to launch in April 2018 will give lower-income savers who can stash away £50 a month, a tax-free bonus of up to £1,200. Initially announced in the 2016 Budget this was our round-up of the account at the time.
- Cash and stocks and shares ISAs, will improve from this April as annual tax-free allowances rise to £20,000 from a current £15,240.
- Tax-free property ISAs, such as the one offered by Zoopla partner Bricklane.com, allow investments from as little as £100 to keep pace the housing market. Find out how more about how property ISAs work with our Q&A.
Don’t forget! The Personal Savings Allowance means you can earn up to £1,000 interest a year tax-free if you are a basic-rate taxpayer, and £500 if you are a higher-rate taxpayer.
“I’m planning on moving home…”
Hoping for a reprieve on stamp duty before your next house move? Unfortunately, the Chancellor ignored industry calls to overhaul the property tax.
These included demands for the tax to be paid by sellers rather than buyers, an exemption for retired people downsizing, and a reduction in the 10% and 12% top-tier stamp duty rates.
“I’m a homeowner with spare rooms…”
No mention was made of it in the Budget, but supporting documents reveal the Government plans to consult on redesigning the Rent a Room scheme which enables people to earn up to £7,500 a year tax-free through renting out a room in their home. Find out more about the Rent a Room scheme with our Q&A.
“I’m a renter…”
If you were holding out for the ban on lettings agent fees Hammond promised in his Autumn Statement last year, the Budget failed to clarify a date at which it would take effect. In fact it wasn’t mentioned at all by the Chancellor. However, the consultation will reportedly take place this month or next, bringing the ban one step closer to reality.
In the meantime, here’s a round-up of the kind of rental fees a lettings agent might charge.