Budget 2024: Another wasted opportunity to address UK housing issues

Following several years where housing and property were barely acknowledged in a budget, was today any different?

Related topics:  Property,  Housing,  Budget
Property | Reporter
6th March 2024
Jeremy Hunt - Budget 616

In a word, no. Chancellor Jeremy Hunt has delivered his Spring Budget and probably the last major fiscal announcement ahead of this year's highly anticipated general election. And yet, despite historical proof that a strong property market always boosts the economy and much talk from within Westminster about 'electoral battle lines' likely to be drawn across the UK housing market, homeowners, landlords, tenants, and many working in the industry will be further convinced that housing is simply not a priority for this government.

In the weeks running up to today's announcements, along with all the rumours, there have been many calls from within the industry for the Chancellor to focus attention on several key areas that would help to stimulate the market. Here are some of the most popular and what the Chancellor decided to do about them.

Stamp Duty Land Tax

Currently, Stamp Duty is paid on residential properties costing more than £250,000, unless you qualify for first-time buyers relief. Eligible first-time buyers pay no Stamp Duty on properties costing up to £425,000, and discounted rates on homes valued up to £625,000.

The tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.

However, it is only a temporary measure and calls have been made to make this a permanent threshold.

Additionally, 'localising' stamp duty and aligning the tax to regional house prices would help give first-time buyers a welcome boost, effectively flattening out the disparity in house prices and earnings across the UK.

There were also calls to scrap Stamp Duty for mortgage-holders downsizing, in a move that would help free up accommodation for larger families and provide further stimulation for the market.

What was announced here was that multiple dwelling relief for SDLT is to be abolished, which received one of the biggest reactions from the house.

Further support for first-time buyers (99% mortgages)

Rumours of a new government-backed 99% mortgage scheme aiming to support people struggling to get a foot on the housing ladder had been circulating for at least two weeks prior to today.

The scheme, which would only require home buyers to put down a 1% deposit on their first home, with the government acting as a loan backer, was heavily criticised by the industry with Rightmove saying the scheme would only likely support "a relatively small group."

However, by the end of last week, it was quietly announced that the policy was to be scrapped before even being formally announced.

Increase and equalise Lifetime ISA and HTB ISA thresholds

Updating the Lifetime ISA scheme is a 'no-brainer', according to the HomeOwners Alliance.

By removing the outdated 6.25% LISA withdrawal fine for people buying a home above the current £450,000 price limit, more people would have the confidence to save into the scheme.

Additionally, there is a lower threshold applied to properties outside London for first-time buyers who are saving in the HTB ISA. £250,000 for those outside of the capital and £450,000 for those in London. However, for those would-be first-time buyers saving in a LISA, the threshold is £450,000 whichever part of the country the property is in.

And despite average house prices rising by around 30% since LISAs were introduced, the thresholds on both schemes have remained unchanged - preventing many first-time buyers from buying a home within the price limits.

Ahead of the budget, there were calls to align these thresholds for the two schemes and raise them to £550,000 across all regions, ensuring both schemes remain relevant for first-time homebuyers across the country.

There was no mention of LISA reform in today's budget.


Capital Gains Tax on properties is due to decrease to 24% from 28%, with the Chancellor adding that it would increase revenues by encouraging more transactions. The move may boost confidence in those who have put off the option of downsizing and ultimately open up more property for first-time buyers, increasing fluidity within the PRS and wider property market.

However, Landlords who are considering selling their properties will see this as a win and the move may actually encourage more landlords to realise any gains in property prices and sell up instead of continuing to keep their property, piling further pressure on the PRS.

Scrapping tax breaks for holiday let owners

The government is to abolish the furnished holiday lettings (FHL) regime, which provides extra tax reliefs for costs incurred when furnishing holiday lets.

The changes, which effectively bring them in line with those for buy-to-let residential properties are likely to impact around 127,000 individual-owned FHL businesses in the UK. Similar tax changes impacting the buy-to-let market over recent years have resulted in many landlords exiting the market as a result.

Ben Edgar Spier, Head of Regulation and Policy at Sykes Holiday Cottages, said: "There are nearly 1.4 million vacant homes in England, according to ONS figures – nearly 16 times more than holiday lets – and more than 100,000 in Wales. It makes more sense to tax these vacant buildings or underused second homes, which both contribute very little. A tax such as this would also encourage people to either sell empty second homes or let them.

“Holiday let owners are already under pressure from high mortgage rates and energy prices after the difficulties of Covid and in a time of price sensitivity for visitors. Squeezing them will not solve the housing crisis but will stifle the very businesses that support tourism spending and employment in communities across the country.”

Scrapping inheritance tax

The abolition of inheritance tax would save UK taxpayers over £5 billion a year while removing less than 1% of the government’s tax income.

Despite this being almost double the proportion that inheritance accounted for in 2010 (0.59%), it’s also such a small slice of the tax pie that the government would be unlikely to miss it - a move that would appeal directly to traditional Tory supporters.

Jack Gill, managing director of Final Duties, said: "The reason such a policy might work is because it appears, on the surface, to be a generous tax break at a time when so many are struggling financially. It also appeals to the Tory stronghold with whom the idea of being taxed on the assets you have gained through a lifetime of hard work doesn’t sit well.

"However, it’s fair to say that abolishing inheritance tax isn't actually that big of a carrot to dangle in front of soon-to-be voters, accounting as it does for such a small slice of the tax pie.

"It’s also fair to say that it would make very little difference for the majority of people because, as was recently reported, only 4% of estates in the UK are actually subjected to inheritance tax. So if an abolishment does make a difference, it will only be for the most wealthy corners of society.”

Once again, like so many other budgets, this was a huge missed opportunity to support homeowners, landlords, and the UK property market.

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