Budget 2024 response - News

Budget 2024 response

Budget 2024 response

General George F. White 8th March 2024

Earlier this week Jeremy Hunt unveiled what will surely be a pre-election budget and within that were announcements on changes for short term holiday lets and also Agricultural Property Relief – having taken time to consult internally some of our team have shared their thoughts on those specific announcements.

Donna Cheney, Senior Associate

“The reduction in Capital Gains Tax may encourage some previously reluctant landlords into the Buy To Let (BTL) market.  It is unlikely to mean a flurry of BTL property coming onto the market - I don’t think existing landlords will suddenly decide to sell because of the cut, especially given how high rents are currently.

The abolition of the Furnished Holiday Lettings (FHL) tax may mean that landlords in coastal areas, National Parks, etc may now look to let their properties on a longer term basis (i.e. six months + Assured Shorthold Tenancies) which may help to relieve some of the shortage of rental stock in those areas, but probably not enough to make a significant difference in terms of much needed supply across the private rental sector.”

Lindsay French, Partner

“I do think that this budget missed an opportunity to improve demand in the housing market, with a failure to permanently act upon stamp duty and no incentives for first time buyers, who are the backbone of the market, or incentives for those with low deposits, given that mortgage rates are still perceived to be high and the value of properties for sale are continuing to creep upwards.

The end of the furnished holiday let scheme will certainly be bad news for owners who have let their properties for holiday rental income and meet the criteria set out in the FHL, those with a single holiday home or those who let their properties through Airbnb, etc. While this change is well intended in the hope that it will increase long term rental options for locals and help to plug the gap created by the National Insurance cut, I am not sure that this will be the case.

With Capital Gains Tax being cut, there could be a propensity to sell, rather than let, there will also be a huge disproportion in the incomes of an AST and a holiday let, that even the loss of the FHL will not plug.”

Andrew Entwistle, Partner

“It was a relief and, probably an expectation, that it was clarified in Wednesday’s Budget that farmland put into qualifying environmental agreements will still be eligible for Agricultural Property Relief.  With the implementation of bio-diversity net gain, nutrient neutrality etc, this was a key question that advisors were waiting to have an answer for. 

The only note of caution is that farmers should consider carefully what kind of environmental agreement is deemed as qualifying.  There have been a number of natural capital schemes run by the private sector and care needs to be taken as these schemes, which may not be regulated by a responsible body, may not qualify for Agricultural Property Relief.”

Whether or not the budget announcements have changed your view on your assets if you require advice or assistance to buy, sell, let or manage please contact us on 0333 920 2220.

 

                                

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