Chancellor looks to build confidence with Spring budget

The Chancellor delivered the Spring Budget today, 15 March 2023, outlining a positive economic outlook in relation to growth, inflation and debt that will build confidence to those looking to buy and sell their homes.

Levelling Up

Additional funding for Levelling Up regeneration projects will also help to develop communities and places where people want to live, which include:

• • Over £200 million for high-quality local regeneration projects in areas of need
  • Over £400 million for new Levelling Up Partnerships for twenty areas in England
  • Business rates retention expanded to more areas in the next Parliament
  • 12 Investment Zones across the UK including 4 across Scotland, Wales and Northern Ireland
  • £8.8 billion over the next five-year funding period for a second round of the City Region Sustainable Transport Settlements.

Decarbonising housing

A call for evidence has been launched on views on potential areas to reform the VAT energy-saving materials relief. With the aim of providing tax incentives worth approximately £280 million to improve the energy efficiency of homes over a five-year period.

However, despite the continued focus on VAT relief in this area, it is disappointing that funding for energy efficiency improvements be-it for homeowners or landlords is not on the UK Government’s agenda and the Budget is a missed opportunity to support people to decarbonise the housing sector.

Frozen duty and energy prices

The energy price cap will remain at £2,500 for another three months and those people on pre-payment meters will see their charges in line and comparable with those that pay by direct debit.

The planned 11p rise in fuel duty will be cancelled, maintaining last year’s 5p cut for another twelve months, which is intended to save a typical driver another £100 on top of the £100 saved since the 2022 cut.

Alcohol duty will rise with inflation, however, the duty on average-strength draught beer sold in pubs across the UK will be frozen.

Other measures to support individuals

30 hours of free childcare for every child over 9 months will be provided, with support being phased in until every eligible working parent of under 5s receives this support by September 2025.

The UK Government will pay the childcare costs of parents on Universal Credit moving into work or increasing their hours upfront. The maximum they can claim will also be boosted by around 50%.

The Pensions Annual Allowance will be increased from £40,000 to £60,000 and the abolition of the Lifetime Allowance will remove the disincentives to work for longer.

There will be an increase in the Administrative Earnings Threshold for Universal Credit, the minimum amount a person can earn without being asked to meet regularly with their Work Coach.

Business rates evaluation

In tandem with the Budget, a consultation on the disclosure: sharing information on business rate valuations was launched. The Valuation Office Agency (VOA) wants to input from ratepayers, agents and landlords on plans to disclose more information on business rate valuations, including what is needed to judge if a valuation is fair, and what is considered sensitive data.

The whole of the UK

Many of today’s decisions on tax and spending apply in Scotland, Wales and Northern Ireland. On areas that don’t apply UK-wide, the Scottish Government will receive around an additional £320 million over 2023-24 and 2024-25, the Welsh Government £180 million, and the Northern Ireland Executive £130 million.

Nathan Emerson

Nathan Emerson, CEO, Propertymark, said:

“Frustratingly, there was no mention of tax incentives to boost the much-needed supply in the private rented sector.

“Whilst we recognise the UK Government’s focus on getting more people into work, there is little appetite to improve the welfare system and support those struggling the most which will have a continued knock-on impact, particularly for those low-income households who rent.”

Kindly shared by Propertymark

Main photo courtesy of Pixabay