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Revealed - what was announced in the Budget and Spending Review?

Since it was announced that a second Budget would take place at the end of the year, estate agents and letting agents across the UK have anticipated what changes might be around the corner.

Following the chancellor’s Autumn Budget announcement, Ideal Locations break down exactly what was announced and how these upcoming changes will impact those in the property industry.

Tax changes

There was much speculation that major changes to property taxation would be covered during the announcement by Chancellor Rishi Sunak, but instead it was quite the opposite.

The stamp duty holiday - which started in July 2020 and ended in September 2021 - helped thousands of first-time buyers and home movers living in the UK to move home more easily. However, during the Budget, there was no mention of stamp duty – and neither was there any mention of inheritance tax or council tax.

During the announcement, though, one minor change to Capital Gains Tax was revealed. Starting from midnight on October 27 2021, the 30-day tax deadline was extended to 60 days, allowing accountants who file taxes on behalf of their clients more time to complete this process.

A 1.25% national insurance increase will also come into action from April 2022. This change is likely to impact the monthly incomes of homeowners and prospective homebuyers. By understanding changes such as these, both sellers and landlords can form a better understanding of the financial shortcomings prospective buyers or home movers could be going through.

Combatting the cladding crisis

A new tax called the Residential Property Developer Tax (RPDT) was confirmed during the Budget and will apply from April 1 2022 on developers with annual profits of over £25 million.

Sunak stated: “We’re also confirming £5bn to remove unsafe cladding from the highest-risk buildings, partly funded by the Residential Property Developers Tax, which I can confirm will be levied on developers with profits over £25m at a rate of 4%.”

The upcoming cladding tax aims to tackle a major issue in the property industry. More than four years after the Grenfell tragedy which claimed 71 lives, many buildings across the UK remain covered in unsafe cladding. By raising these funds, the government aims to overcome the cladding crisis which continues to impact sales and lettings.

Building new affordable houses across England

With the National Housing Federation’s estimate for council housing waiting lists at £3.8 million people and inflation making saving for a property unfeasible for many, news of more affordable homes on the way is a step in the right direction.

The government says it will provide £11.5 billion to build up to 180,000 new, affordable homes the country needs annually, some 20% larger than the previous programme.

During the Budget, Sunak clarified: “We are investing an extra £1.8 billion, enough to bring 1,500 hectares of brownfield land into use, meet our commitment to invest £10 billion in new housing and unlock a million new homes.”

As opposed to building on green space or the Green Belt, these new homes are set to be developed on brownfield sites. CPRE’s annual state of brownfield report shows that there is enough suitable brownfield land available in England to supply over one million homes across over 26,000 hectares and 18,000 sites.

With millions of homes around the world lying empty, bringing homes back into use is another alternative that the government could consider. In a recent study, England ranked 20th place in a survey of the global locations with the emptiest homes. In total, there are around 225,845 empty homes across the country, which accounts for 0.90% of properties.

The types of houses the government wants to see built were not outlined during the Budget, however, we are optimistic that new homes at an affordable rate will help see more people become homeowners. Many industry experts expect more underlying details will be uncovered over the coming months. Here at Ideal Locations, we understand the changes the UK property market is undergoing and the impact it has on us as individuals. With a knowledgeable local estate agent, you can improve your chances of selling by ensuring your home is ready for sale. You can contact us for more information about selling a home in locations such as Ilford, East London and Essex. You can also request a free instant online valuation to find out what your property could currently be worth.