Despite the increase on Capital Gains Tax, word from the property sector has generally been positive. Especially with the opportunity to claim the ‘Super Deduction’ rate of 130% .
Business Matters sought to acquire comments from leaders in the sector who were willing to share their opinion here:
Pantazis Therianos, CEO of London focused Euroterrra Capital said:
‘As a well-established developer, investor and operator of heritage properties in W1 and W2 London, the budget is a tale of two halves. On one hand we will be hit like other large and buy-to-let landlords by an increase in Corporation Tax and Capital Gains Tax, which squeezes profit margins on some of our larger townhouse sales.
‘On the other hand, as a company who relies on London being a thriving city for culture and hospitality, we welcome the £400M investment being made to support the arts and high street businesses such as cinemas, theatres and clubs – these are the places that make the neighbourhoods we invest in so unique and we need life to return to these pockets of London in order to attract tenants and buyers to our portfolio.
‘We are also encouraged by the extension of the stamp duty holiday to June as whilst this doesn’t directly affect our PCL investor clients, it does help stimulate the market and support pricing, which is good for us as a landlord and operator.’
Jason Tema, director of property development firm Clearview Developments commented:
‘We welcome the government’s introduction of a super-deduction on company investments. With the UK’s ongoing demand for quality and affordable housing, we believe that this tax incentive is a much needed boost of confidence for the construction sector; particularly for SME house builders who have been hard hit by the pandemic.’
Bruce Burkitt, Managing Director at Property Experts said:
‘Today’s budget could well be the most important in the post-war era. Following the release of the Prime Minister’s roadmap out of lockdown and the widespread success of the vaccine rollout, the Chancellor has several important decisions to make to support the roadmap and stimulate the economy, whilst also reforming the property market.
‘We welcome the Chancellor’s decision to create a pathway to support first time buyers who are seeking to get on the property ladder. The extended Stamp Duty holiday and 95% mortgage guarantee should serve as two effective mechanisms to ignite momentum in the market.
‘One thing we learnt from the initial Stamp Duty holiday was that people do want to move, especially at the lower end of the market. However, the cost required alongside a deposit is a big financial ask, especially in today’s economic climate and proportionally far more than previous generations faced. Hence, the introduction of mortgage reforms, we hope, will further stimulate the benefits of the Stamp Duty holiday.
‘The treasury is taking a much-needed big picture approach by focusing on the economic activity generated by people moving, the increase in property transactions, the jobs this creates and potential other tax revenues for the government. Moving involves a whole host of industries from estate agents and solicitors, to painters and decorators, and getting people moving in high volumes, once again, will be extremely beneficial to the wider economy.’
Rishi Sunak’s Budget 2021 is hopefully paving the way for more of Britain’s first time buyers to finally get a foot on the property ladder as he backs up Prime Minister Boris Johnson’s goal to turn ‘rent to buy’. Wendy Hegarty, Partner at new homes agent and consultancy Red Loft, commented:
‘Low-deposit mortgages have all but completely disappeared in the last year as a result of the pandemic’s impact on the UK economy – most mortgage lenders will now only offer a maximum 90% loan-to-value, but even these are proving hard to come by, with many first time buyers needing to generate at least a 20% deposit to get their foot on the property ladder – which is understandably completely out of reach for many.
‘At Red Loft, we firmly support a government-backed mortgage guarantee scheme. This will not only go a long way in making home ownership much more accessible to hopeful buyers, but also offer a wider variety of lending products – so buyers will once again have the opportunity to choose the mortgage that is right for them.
‘Today’s announcement spells good news for the property market. In the short-term, we expect to see a sharp uplift in interest, followed ultimately by sales, as those who have been unable to get a mortgage for the past 12 months once again begin their property search. Additionally, the Stamp Duty Holiday extension will help to ease the pressure many buyers are feeling to complete in the next few weeks – there’s no doubt this will save a lot of last minute drop outs.
‘Long-term, we would also anticipate this Budget announcement may help to boost housing delivery – with a number of developers and Housing Associations keen to fast track the delivery of developments in order to meet the increased demand for homes that will come with the April roll-out of these new 95% mortgages. This increased build programme across the board would help keep the market afloat – avoiding the significant house price inflation that many are worried about.’