March Newsletter

The focus of this monthly update will be the spring budget announced by the Chancellor of the UK last week. While there were no drastic changes in terms of the property industry, there were a few key points that this update will focus on; a change in capital gains tax, the removal of stamp duty relief on multiple dwellings, and the abolishment of the non-dom status. We will also touch on how the market has performed, as there has been the first positive annual price growth since January. 

Chancellor spring budget

The Chancellor of the UK recently announced his spring budget, part of which tackled property. In my opinion, none of the measures announced by the chancellor were drastic (in a positive or negative way), however they are still worth highlighting. 

Capital gains tax

The welcomed news is that the Chancellor announced that he is reducing the rate of capital gains tax charged on house sales from 28% to 24%. This will not impact owners selling their main residence as there is no capital gains tax charged on that, however it will apply to landlords and owners of second homes. It could convince some in these two groups to sell their properties, leading to more transactions in the market. 

Stamp duty land tax on multiple dwellings 

The chancellor announced that the government is abolishing the tax relief used by landlords when making bulk purchases. This naturally won’t be good news for professional landlords, as the stamp duty relief provided a significant saving and therefore may result in fewer bulk purchases. One could also argue that this will have a negative effect on tenants, as a reduction in landlords could mean in fewer properties to rent, resulting in higher rental prices. 

Non-dom status abolished

The chancellor has vowed to abolish non-dom status. Residents with this status maintain a home abroad and only pay UK tax on the money they earn in the country, but not on the money that they earn overseas unless they bring it into the UK. This won’t kick in until April 2025 and those who move to the UK from then won’t be asked to pay UK tax on foreign income for four years.

I don’t believe this will have a significant impact on the market. It could impact that super prime end of the market, as some with non-dom status might decide to permanently relocate to more tax efficient countries. Homes in prime central London have always been considered a safe haven, so I don’t see a rush of prime central London homes coming onto the market for sale as a result of this. 

Market performance 

House prices in London have risen by 1.5% - the reported first annual price growth seen since January. The director of Halifax Mortgages said that the figures “continue to suggest a relatively stable start to 2024 with other promising signs of an increased housing activity, such as mortgage approvals”. According to an article in The Evening Standard, the consensus between property companies/professionals is that there seems to be more interest as we head to spring from both buyers and sellers. More properties have been coming to market and more buyers are registering their interest with agencies. 

The market is starting to heat up – if you’re interested in purchasing a property in London it’s essential to be ready to act when the right property is found. Working with a buying advisor will ensure that you have all the elements in place to act swiftly, while providing you with a significant edge over other buyers. A buying advisor will ensure you buy right – the right property, at the right price, in the right location. Having access is key in a busy market, and buying agents have access to properties before they hit the open market.