How the Spring Budget impacts Londoners

Londoners were largely unimpressed with the Spring Budget and its efforts to relieve housing shortages in the capital, despite it being one of the only locations to get a mention of new homes development. That said, the cuts in National Insurance and increase of thresholds in child benefit payback should help affordability, further stimulating demand for properties available now.

Here we unveil how Chancellor Jeremy Hunt’s budget impacts you whether you are looking to buy, sell or rent in London.   

Canary Wharf development

The announcement for Canary Wharf saw the pledge of £118 million in levelling-up funding to speed up the delivery of a life sciences hub, a healthcare diagnostic facility, commercial and retail floor space and up to 750 homes. In Barking Riverside, meanwhile, a further £124 million investment will unlock the delivery of 7,200 homes.

This creation of new space and new homes in the area will help attract more buyers, landlords and tenants alike to London, and on a wider scale, complement other developments in the area such as the Canada Water masterplan.  

Economic confidence improves

Hunt spoke too of greater confidence in economic forecasts for the UK, expecting growth of 0.8% this year and 1.9% next - 0.5% higher than the OBR had previously estimated. He claimed that government debt and borrowing were also falling.

This sits alongside the more relevant picture of inflation for consumers, the state of which is the most likely lever to unlock buying and selling demand. 2022’s 11.1% inflation peak drove up interest rates and mortgage rates to record highs, but Hunt has now said that inflation should hit its 2% target in a “few months”. It stood at 4% in January.

More money for many

Ahead of the possibility of future mortgage rate cuts, if inflation does hit target and interest rates and mortgage rates can subsequently fall, Hunt introduced other measures to improve affordability. After already cutting National Insurance levels in his autumn statement, Hunt used this budget to unveil a further 2% cut from 10% to 8% from April. For those earning an average £35,000 wage, this 2p cut should equate to an extra £450 a year.

Hunt also extended freezes on fuel and alcohol duty in an effort to help consumers better manage the cost of living, giving them the opportunity to divert extra pounds to property.

The raising of the threshold for paying back child benefit, from £50,000 to £60,000, should impact 170,000 families in the UK as a whole. Meanwhile, the raising of the threshold for full repayment, from £60,000 to £80,000 from April, should put an extra £1,300 a year in the pockets of nearly half a million families with children.

But various tax cuts will impact landlords

For landlords, however, there were several impacts from the Chancellor’s speech. Capital gains tax was reduced from 28% to 24% and could prompt the release of more properties to the market.

But there were also changes to tax concessions for furnished holiday lets, which will end from April next year, as well as to multiple dwellings relief.

If you are looking to sell or buy, or maybe you just want some professional advice from a 5-star rated, multi-award-winning agency, please get in touch on 0207 231 0002 or email welcome@living-london.net

You can also get an instant online valuation of your property by clicking here.