The new Chancellor Rishi Sunak announced his budget this afternoon. But the big news relating to property came more than five hours before.
The Bank of England (BoE) announced an emergency cut in interest rates to bolster the economy in the ongoing fallout of the coronavirus outbreak.
The BoE reduced rates from 0.75% to 0.25%, taking borrowing costs back down to the lowest level in history.
This drastic move should promote mortgage lending and make it cheaper and easier to get a mortgage. This could help maintain the positive momentum in the housing market since the election in December.
The flip side is it is almost pointless saving money in a bank, which is more than likely what the cut is designed to do. To get people spending and investing, rather than saving.
Back to the Budget
For domestic landlords, there was very little to get excited about. It contained nothing of note that was directly linked to them or the lettings industry. But there could be an opportunity further down the line thanks to the change below.
The only stamp duty measure is a two per cent surcharge on the purchase of UK investment properties by non-resident overseas buyers. This is set to begin in April 2021.
However, if the tax deters overseas investors, it could reduce competition for domestic landlords who could then invest in providing more homes for a growing number of tenants.
The budget’s key focus was quite rightly trying to protect the people of the UK against the health and financial impact of the Coronavirus with a £30billion fund to fight the disease and its fallout.
Help for the Homeless
A welcome £650m commitment was made to provide more than 6000 places for homeless people and rough sleepers.
And the Chancellor announced a freeze on the duties on fuel and alcoholic drinks including cider, whisky and beer.
There was also £500m a year assigned to fixing 50 million potholes. So perhaps a smoother journey in the future is something worth raising a glass to?
To find out more information about what the budget could mean to your rental investments and the Crediton property market get in touch or ask us a question on social media!