Spring Budget overlooks first-time buyers

It was a disappointing Spring Budget for anyone looking to get onto the housing ladder. There were no announcements on Lifetime ISAs, no changes to Stamp Duty thresholds, no replacement for Help to Buy and the Chancellor had already scrapped plans for 99% loan-to-value (LTV) mortgages after resistance from the banking community. 

A deafening silence 

Coventry Building Society’s Jonathan Stinton said the silence around housebuilding was deafening, adding that the Budget, “could have been an opportunity to present new innovative schemes which help buyers with affordability as well as saving for a deposit – but not even the bare minimum was done. It’s not only incredibly disappointing, it feels like a big mis-step on the Chancellor’s part. First-time buyers are the foundation on which the rest of the housing market stands. Failing to give them proper help is failing to help the rest of the market.” 

Rightmove’s Tim Bannister said, “We had hoped the government would seize the opportunity to help first-time buyers and reform the outdated Stamp Duty system today. Instead, home-movers were left with extremely little and the temporary Stamp Duty thresholds weren’t even made permanent, meaning more will pay higher rates of Stamp Duty next year, unless the government makes them permanent in the autumn.” 

Other measures to be aware of 

There were some housing measures announced in the Budget, but these have bigger implications for private landlords and second homeowners rather than aspiring and current homeowners: 

  • The higher rate of Capital Gains Tax (CGT) will be reduced from 28% to 24% and the lower rate of CGT has been maintained at 18%. It’s worth noting that you only pay CGT on second homes 
  • The Furnished Holiday Lettings tax regime will be abolished – second homeowners can no longer deduct mortgage interest from their rental income or pay lower CGT when they sell 
  • In England and Northern Ireland, Stamp Duty Land Tax (SDLT) Multiple Dwellings Relief (MDR) will be abolished from 1 June 2024. There is an equivalent MDR relief under Land and Buildings Transaction Tax (LBTT) in Scotland and it remains to be seen if the Scottish Government will consider how MDR applies in future. 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home. Equity released from your home will be secured against it.