Spring 2024 Budget Wishlist; Transforming Housing with Affordability and Green Initiatives:

As the Spring Budget of 6th March 2024 draws near, there are several reforms that could significantly benefit the real estate sector, according to Rightmove. The recommendations focus on enhancing affordability, accessibility, and sustainability in the housing market.

Regional Adaptation of Stamp Duty Thresholds:

Rightmove proposes adjusting stamp duty thresholds to align with regional property prices. Current uniform thresholds across England do not reflect the vast differences in housing affordability, with only 4% of London homes exempt from stamp duty for all buyers, in stark contrast to 71% in the North East. Such disparities suggest a need for a more localised approach to stamp duty, potentially aiding first-time buyers and stimulating market movement.

Rightmove's property expert, Tim Bannister, emphasises the importance of addressing the stamp duty barrier to facilitate easier property transitions, advocating for permanent adjustments to first-time buyer stamp duty charges and considering regional price variations for broader reform.

Beyond 99% Mortgages: Innovative Solutions for First-Time Buyers:

The rumoured introduction of 99% mortgages in the upcoming budget, while a step towards innovation, may not sufficiently broaden access for first-time buyers. These high loan-to-value (LTV) mortgages tackle the challenge of accumulating a substantial deposit but do not address stringent lender affordability criteria, leaving many potential buyers sidelined.

Rightmove’s mortgage expert, Matt Smith, acknowledges the efforts to introduce new mortgage products but stresses that a 99% LTV mortgage might benefit only a limited demographic. Effective solutions should ensure a balance between prudent lending and expanding homeownership opportunities.

Enhanced Incentives for Landlords to Invest in Energy Efficiency:

To prevent landlords from selling off rental properties and to encourage them to make energy-efficient upgrades, Rightmove suggests more robust incentives, such as grants or tax benefits. Recent backtracking on energy efficiency targets and uncertainty around future EPC regulations have led to a decrease in landlords’ willingness to invest in green improvements.

Rightmove’s lettings expert, Christian Balshen, points out the decline in landlords planning to upgrade properties to a C rating or higher, underscoring the need for clear, accessible financial incentives to enhance the energy efficiency of rental homes for the benefit of tenants.

These recommendations by Rightmove highlight critical areas for government action to support the real estate market, from making property purchases more accessible to promoting sustainability in the housing sector.

Written by Veera Josey, 28th February 2024

Source: Rightmove