Spring Budget 2025: The prime property industry’s hopes & fears

Our panel of luxury property leaders urges the Chancellor to ease the tax burden on residential transactions, and to make Britain a more hospitable place for international investors & HNWIs.

Chancellor Rachel Reeves is due to present the annual Spring Forecast and economic statement later this week (on 26th March). This is not supposed to be a full “fiscal event” like the Autumn Budget, but Treasury sources recently warned that “the world has changed” in the last six months – implying the Spring Statement may be more than an economic sit-rep. Tax changes and policy shifts are very possible.

So we asked leaders in the prime property sector what they most hope Reeves will announce on the 26th, and what they most fear will come to pass:

  • What measures could the Chancellor announce in a Spring Forecast Statement that would bolster the property market?
  • Which policies could (or already are) doing most damage to the high-value residential property sector?

Our panel – which includes estate agents, buying agents, developers, designers and mortgage brokers – is not optimistic. Given the bleak wider economic landscape, not-great news on the geopolitical front, warning noises about public sector over-spending, and a left-leaning government – the likelihood of any announcement in favour of luxury homes is slim.

As is now tradition, Stamp Duty reform tops many property pros’ wishlists. Simon Barry of Harrods Estates says “the current regime creates an artificial market where both buyers and sellers are penalised for wanting to move or invest.” Buying agency boss Camilla Dell argues changes to the SDLT regime since 2014 have been “like pouring glue into the London property market”, and advocates for a return to the pre-George Osborne “slab” structure.

Stamp Duty cuts are unlikely, admits Robin Edwards of Curetons, but “even the hint of an easing or targeted relief for specific groups, such as first-time buyers and downsizers, could inject some much-needed momentum into the market.”

Other key concerns include ongoing fallout from the abolition of Non-Dom tax breaks, “unintended consequences” of the Renters’ Rights Bill, and the possibility of hikes to Capital Gains Tax or even the introduction of a new mansion tax or wealth tax targeting the super-rich.

More positive notes focus on the potential for effective reform of Council Tax – balancing the levy so more affluent areas and higher-value homes pay a fairer share, and the potential to remove or reduce VAT on some construction and home renovations – which Harrods’ Barry argues would be “a game-changer” for the property market.

There’s also an underlying cheerfulness about the relative stability of the current UK government, at least when compared to all the goings-on of recent years.

Overall, prime resi movers and shakers would like to see lower taxes and more encouragement for – rather than deterrents to – inward international investment. Becky Fatemi of Sotheby’s International Realty UK sums up the mood: “The worst thing Reeves could do right now is double down on punitive taxes that push wealth out of London”.

Talking Heads: Luxury property leaders’ Spring Budget wishes & fears

Revert to the pre-2014 slab system of Stamp Duty

– Camilla Dell, Managing Director at Black Brick

“Unfortunately, our ‘wish list’ for what we think should happen to the property market is unlikely to be fulfilled, but if we had a magic wand…

  1. Stamp Duty: By far the biggest cost that a buyer incurs. When George Osbourne changed Stamp Duty rates in 2014, he changed the market forever. Those changes and indeed subsequent changes have been like pouring glue into the London property market. Transactions are fewer and people have no incentive to move. I would reverse Osbourne’s changes and revert to the old slab system with a top rate of 7% (and 3% extra for overseas buyers or second homes).
  2. Reform Council Tax: Considering the above, I would then change the way council tax is charged, ensuring more affluent areas and expensive homes pay more and that these funds can be used to help fund wider public services in the borough.
  3. Renters Reform: again, something that is being brought in, without any thought of unintended consequences. Landlords now have no security of tenure, with tenants being able to serve notice at any time which may push even more Landlords to sell, and reduce rental supply further, thereby harming the very people the government is trying to protect.

“Along with stamp duty, changes to the UK Res Non-Dom tax regime are by far the most harmful to the Prime Central London property market. We have taken calls from several clients all selling up due to Non Dom changes as they do not wish their entire estate to be drawn into UK IHT. A much smarter move would have been to keep the regime intact and instead charge a much bigger annual fee for Non Dom’s to retain their tax status.”

If the property market comes out of the Spring Statement relatively unscathed, demand should build over the year as buyers adapt to the new lending landscape

– Tom Bill, head of UK residential research at Knight Frank

“The government wants to boost tax revenue and encourage economic growth but its new rules for non doms risk doing neither. A tweak to the legislation around inheritance tax and overseas trusts would notably lower the number of foreign investors leaving the UK, but political ideology has so far trumped economic pragmatism. The government has also not been swayed by arguments in favour of an Italian-style flat tax to make the UK more competitive on the international stage.

“The inflationary impact of policies like higher employer national insurance contributions and minimum wage rises is a risk for the UK housing market. If inflation stays higher for longer, that will keep upwards pressure on mortgage rates. However, if the property market comes out of the Spring Statement relatively unscathed, demand should build over the year as buyers adapt to the new lending landscape.”

The worst thing Reeves could do right now is double down on punitive taxes that push wealth out of London

Becky Fatemi, Executive Partner at Sotheby’s International Realty UK

Wish: “London has lost too many of its UHNW residents, and it’s time to bring them back. The Spring Budget needs to send a clear message: London is open for business again. We should be rolling out the red carpet with policies that make it worth staying – like a more competitive non-dom tax regime, a longer tax exemption period for new arrivals, or incentives that encourage investment in UK businesses rather than pushing money offshore. The wealthy have choices, and right now, they’re choosing Dubai, Monaco, or Italy. If we want London to remain the world’s capital of opportunity, we need to stop pushing people away and start making them feel welcome again.”

Nightmare: “The worst thing Reeves could do right now is double down on punitive taxes that push wealth out of London. The city thrives because it attracts visionaries – entrepreneurs, investors, creatives—people who drive innovation and fuel our economy. If the Spring Budget brings more tax hikes – like higher Capital Gains Tax, an extended wealth tax, or even harsher inheritance tax rules on UK property – those people will simply take their wealth elsewhere. We’ve already seen international buyers turn away due to increased stamp duty and the non-dom crackdown. If the government keeps making London an expensive place to succeed, we risk turning it into a playground for tourists rather than a global hub for wealth, business, and culture.”

Adjustments to Stamp Duty could significantly enhance market fluidity, especially at the higher end

– Craig Tonkin, Regional Sales Director at Hamptons London

“As we approach the Spring Forecast, the property market, particularly in Prime Central London, is poised for potential shifts. While we hope for measures that could invigorate the sector, there are also concerns about policies that might dampen growth.

“In terms of hopes, it would be fantastic to think there might be some sort of stamp duty reform as adjustments here could significantly enhance market fluidity, especially at the higher end, by reducing barriers for both domestic and international buyers. We’re also keen to see a clear, long-term tax strategy that avoids sudden policy changes, providing the stability that investors and homeowners crave.

“However, there are apprehensions too. Any increase in Capital Gains Tax on property sales could stifle transactions and discourage investment, potentially deterring international clients from the London market. Similarly, the introduction of a mansion tax or further restrictions on non-dom buyers could push high-net-worth individuals to seek opportunities elsewhere, slowing the prime market considerably.

“Ultimately, while the Chancellor’s announcements are crucial, the most significant boost to the market in the short term would likely come from a reduction in interest rates. This, of course, falls outside the scope of the budget but remains a key factor in market dynamics.”

Zero-rated VAT on building work and refurbishments for second-hand homes would be a game-changer for the property market

– Simon Barry, Head of New Developments at Harrods Estates

Wish: “Our biggest wish would be for Reeves to reduce SDLT to a level which reflects the reality of property values in London and the South East. The current regime creates an artificial market where both buyers and sellers are penalised for wanting to move or invest.

“In addition, zero-rated VAT on building work and refurbishments for second-hand homes would be a game-changer for the property market. It would encourage investment in existing housing stock, driving sales, revitalising older properties, and embedding sustainability into the industry in a truly meaningful way. Instead of demolishing and rebuilding, homeowners and developers would be incentivised to restore, enhance, and future-proof Britain’s homes – delivering both economic and environmental benefits.”

Nightmare: “Conversely, an increase in Capital Gains Tax (CGT) on second homes and investment properties would risk stifling market activity. Faced with higher tax burdens, many sellers would simply hold onto their properties, further restricting supply and pushing prices even higher. At a time when we need to encourage greater fluidity in the market, additional CGT increases could have the opposite effect, limiting opportunities for buyers and reducing overall transaction levels.”

A change to Stamp Duty for downsizers would get the entire market moving

– Nina Harrison, London Specialist at Haringtons UK

Wish: “My biggest ask would be for Reeves to slash Stamp Duty for downsizers. There are thousands of older homeowners rattling around in houses far too big for them, desperate to move but trapped by eye-watering tax bills. Free them up, and suddenly, family homes start flowing through the market again. Chains speed up, sales rise, and the Treasury still rakes in tax from all the extra transactions. A change to Stamp Duty for downsizers would get the entire market moving.”

Nightmare: “The nightmare would be making it even harder and more expensive to employ people. Businesses are already drowning in costs, and every new tax or regulation just pushes them closer to the edge. If Reeves really wants a thriving economy, she needs to let businesses breathe. Cut the red tape, lower employment costs, and encourage growth. The rise in NI for employers was a mistake – many would welcome a U-turn.”

Rather than deterring foreign buyers, we should be encouraging them

– George Nares, co-founder of Blue Book Agency

Wish: “At the top of my wish list is a substantial reduction in Capital Gains Tax – ideally to 5-10%. This relatively new tax ultimately deters transactions, discouraging people from selling assets, including property. Lowering it would incentivise sales rather than stagnation, stimulating far greater economic activity and, ironically, generating more tax revenue than repeated hikes ever could.

“A reduction in Stamp Duty would also be welcomed. Successive increases have prompted buyers to limit the number of property transactions in their lifetime. Where people once moved as their needs evolved, newlyweds today are more likely to purchase a long-term home that accommodates future children rather than upgrading gradually. A lower tax would encourage more frequent transactions, increasing overall revenue despite a reduced rate. After all, high taxes are futile if they stifle market activity altogether. A more fluid property market means more money circulating through the economy. There is such an opportunity to turbo boost the market. Yet, the early signals from our new government suggest otherwise – so, regrettably, this may remain nothing more than wishful thinking!”

Nightmare: “My greatest concern is the prospect of yet another rise in Stamp Duty surcharges on second homes or foreign buyers. Such measures would dampen demand and make the UK less attractive to international investors. With uncertainty in the US and a fragile EU economy, now is precisely the time to welcome wealthy investors, not repel them. Rather than deterring foreign buyers, we should be encouraging them.”

 

It may be sensible for the Government to investigate why areas with low taxation, such as Florida, are doing so well

– Charles Curran, Managing Director at Maskells Estate Agent

 

“According to the OBR, in 2024/25 the Public Sector raised £1,148.7Bn (£40,000 per household) vs spending £1,276.2Bn (£45,000 per household). The UK is therefore running a budget deficit. Prior to the market correction over the past weeks, the impending US Tariffs and the expected spend on defence, the OBR predicated that this deficit would fall to £70.6bn over the next five years. It is now likely to take much longer.

“Whilst the cost cutting headlines are welcome, our opinion is that the only way to deal with this debt pile is economic growth, which can only be obtained via investment and confidence, both home-grown and foreign. For example, at home, imposing Inheritance Tax on Farmers and businesses is, simply put, ill-conceived as no thought has been levelled on how this tax will be paid: The burden is likely to lead to the closure of small companies and farms, if they survive the Employer NIC increase. The IHT post NIC increase has been likened to “salting the ground after the battle” by Andrew Griffith MP, Shadow Business Secretary. Overall Business Confidence, according to the Adam Smith Institute’s  latest survey, is now of 2.6 out of 10 with 77% of respondence reporting low or very low confidence. It is no wonder foreign corporate investors are waiting by the side-lines.

“For foreign individual investors, Labour must ask itself why anyone would tie themselves to a high tax jurisdiction whereafter 10 years their global assets would fall under the UK inheritance Tax net, even if those assets have nothing to do with, and were not generated in the UK.  It may be sensible for the Government to investigate why areas with low taxation, such as Florida, are doing so well.

“Therefore, Labour needs to introduce an attractive tax regime to drive investment and positive sentiment that in turn will have a galvanising effect across all sectors, including the property market.  In our opinion, the Chancellor needs to continue cutting costs, talk to the Gilt Market, lower taxes, reduce red-tape and then leave it to the private sector.”

The danger is that prime properties are once again seen as easy targets

– Robin Edwards, Partner at London buying agency Curetons

“To be honest we’re really not hopeful about Rachel Reeves’ Spring Forecast, the best we think we can expect is a bit of economic stability and predictability. The prime property market relies on confidence – when buyers and investors feel secure in their financial outlook, they’re far more willing to make significant purchases.

“Stamp duty remains one of the biggest issues, acting as a deterrent not just to new buyers, but also to those looking to move up or down the ladder. While it’s unlikely we’ll see a wholesale reduction, even the hint of an easing or targeted relief for specific groups, such as first-time buyers and downsizers, could inject some much-needed momentum into the market.

“What we most fear is that Reeves in her desire to appear “fiscally prudent” opts to introduce further tax hikes or clampdowns on prime property. There’s been a lot of rhetoric around wealth taxes recently and the danger is that prime properties are once again seen as easy targets. Additional taxes, whether on second homes, foreign ownership or more stringent capital gains tax on high-end property sales could prove devastating.

“It’s not just about more taxes though, but the ongoing erosion of incentives that once made London so appealing to HNWIs around the world. Non-dom reforms have already chipped away at the city’s appeal for wealthy internationals. The UK lost 10,800 millionaires to foreign countries last year, more than double the number that left in 2013. That means since Labour came to power one millionaire has left the UK every 45 minutes. We don’t need yet another signal that the UK is an inhospitable place to put down roots or invest. The constant uncertainty around taxation only amplifies the sense that the UK is becoming increasingly unwelcoming to wealth and success.”

Sustained policy stability would serve as a positive springboard

– Laura Dam Villena, Head of London residential agency at Cluttons

“While stamp duty reductions would be very welcome, it’s unlikely any significant changes will be made.

“In any event, the ideal outcome of the spring budget would be for Rachel Reeves to deliver a statement that creates confidence in the growth of our economy. Sustained policy stability would serve as a positive springboard, encouraging activity amongst both domestic and international buyers alike.”

Be bold and scrap Stamp Duty altogether

– Jennie Hancock, founder and director of West Sussex & Hampshire buying agency Property Acquisitions

“It might seem like a distant memory, but many of us in the property industry can remember the halcyon days of a single 1% rate of stamp duty, until it started creeping steadily upwards after 1997.

“People moved house every 3 or 4 years, when their circumstances changed such as a new job, a new baby, or when their children had left home and they wanted to downsize. And every time they did so, solicitors, estate agents, surveyors, removals firms, builders, architects and so on, all got paid – and so did the government via their taxes.

“Today, stamp duty has distorted and constrained the market so heavily, that we have older homeowners rattling around in large family homes which they no longer need or want, because they can’t face handing £150,000 to the tax man. They would rather stay put and hire a gardener or a housekeeper with that money.

“Meanwhile families are crammed into smaller properties, unable to afford to upsize because there aren’t enough large family homes to choose from. Plus, the stagnated market means they probably haven’t made much on their current home – so the enormous stamp duty bill they would face to upsize has to come out of their existing equity.

“When people don’t move home, the economy suffers, which is why stamp duty is such a pointless and prohibitive tax. As well as all the service providers and suppliers in the property ecosystem who lose out, it’s harder for companies to recruit, workers are forced to commute further to work and you end up with a far less mobile and less productive population.

“This is unlikely to be a tax cutting budget, but I wish the government could see just how much of an economic own goal stamp duty is.”

 

To attract investors, entrepreneurs as well as wealthy individuals, we would like the Chancellor to consider tax incentives and streamline regulations that promote innovation

– David Johnson of property consultancy INHOUS

“Although there is no traditional Spring Budget this year, we expect the Chancellor to announce further measures to tackle the nation’s debt and rising inflation which has hit 3% last month. To date, Rachel Reeves’ Autumn Statement has had a number of implications on the UK property market; especially on first-time buyers who will be facing higher stamp duty thresholds as of April.

“Despite news of wealthy individuals leaving the UK, we have since seen a gradual increase in the number of buyers with budgets over £5million. The Chancellor’s more recent decision to soften non-dom tax changes may have contributed to this uplift. To attract investors, entrepreneurs as well as wealthy individuals, who are crucial for the UK economy, we would like the Chancellor to consider tax incentives and streamline regulations that promote innovation.”

We are still not seeing the return of international buyers who were ever present in the years before Brexit

– Dominic Agace, Chief Executive of Winkworth

What measures could the Chancellor announce in a Spring Forecast Statement that would bolster the property market? “A full-scale replacement for the Help to Buy scheme to ensure there is demand for developers to build the right properties for first time buyers and to help FTBs get on the housing ladder.   This would support developers to help meet their house building targets – and those set by the Government.  The Government needs to tackle stamp duty if they want to make it easier to move and have the economic benefits of a more fluid housing market. This has been  proven every time there is a tweak to stamp duty – most recently by the rush driven by the March 31st deadline.”

Which policies could (or already are) doing most damage to the high-value residential property sector? “From a London perspective,  we are still not seeing the return of international buyers who were ever present in the years before Brexit.  This reflects the fact that so far Labour hasn’t boosted the demand from the international community to live and work in London.   The growth narrative from the Government has yet to be delivered.  The prevailing sentiment is concern about future taxation targeting high net worth individuals.  The Government needs to change the mood music. Reforming their own non-dom taxation initiative further would go some way towards that.  They also need to address inheritance tax changes. Non-doms who have built wealth overseas are now finding it will be caught up in UK taxation should they stay too long in the country.  The top of the market is struggling in the face of this.

“This seems to be more of a political stance, rather than one rooted in economics. These high net worth individuals are wealth generators. This is recognised by other countries such as Italy, which is actively pursuing them.  The UK, as a small nation without an abundance of natural resources, is at its best as an internationalist trading nation. To fulfill the role globally, it needs to look at changing its international perception. More effort is being made on the international stage and global relations.  However, policy needs to follow, and so removing barriers to  net worth individuals to live here would be a good starting point.”

Stamp duty has to be reformed

– Nick Austin, agent with RiverHomes in Putney, and Conservative councillor & housing spokesperson for Wandsworth council

What measures could the chancellor announce in a Spring Forecast Statement that would bolster the property market? “Stamp duty has to be reformed. Boomers are staying in homes that are far too large for them because they can’t afford the stamp duty that they’d invariably have to pay to downsize.  They’re not moving down the property ladder which means that families can’t move up the ladder.  First time buyers can’t enter the market because the whole market is log jammed.  We may be operating near or at the top of the market but the bottom of the market has to move to support the rest.

Which policies could (or already are) doing most damage to the high-value residential property sector? “Where do I start?  The tax relief reductions on buy-to-let, the doubling of council tax on second homes and the changes to non-dom status are all leading us to where we are now.  It’s a demand issue.  Almost every agent has a surplus of flats on their books they are struggling to shift.  The gulf between flat prices and house prices has never been wider and today’s headlines show that there have never been so many empty properties in London yet we have a housing shortage.  What’s more, agents rely on volume and it was typically apartment sales that we relied on to keep up the number of transactions.  Flat sales injected liquidity into the property market and without them, the whole property industry suffers.”

Any moderation of SDLT would be welcomed. However, neither moderate or substantial changes seem likely

– Simon Capp, Head of Residential Sales at British Land

“Stamp Duty (SDLT), alongside purchase and ownership costs, is front of mind for buyers when calculating the affordability of prospective purchases. SDLT is a substantial source of revenue for the Chancellor, but to maximise tax revenue the right balance needs to be struck to encourage a healthy rate of transactional activity. Essentially at what level will SDLT encourage buyers to buy and sellers to sell.

“With headwinds continuing in the market, namely elevated interest rates which are expected to track downwards slower than earlier predictions, buyers in the current climate are measured and methodical in their decision making. As an affordability barrier, any moderation of SDLT would be welcomed.  However, neither moderate or substantial changes seem likely. The UK residential market is remarkably robust, and so far, 2025 has demonstrated green shoots with increased new enquiries and strengthened appetite from buyers looking to make a property move by the end of the year.”

The biggest threats to the market have already hit, and are here to stay

– Ranjit Thaker, Founder of Thaker Acquisitions

Fears: “The biggest threats to the market have already hit, and are here to stay. The most realistic announcement that should come into force is an extension for First-time buyers to benefit from the current threshold of £425,000 before being liable for SDLT. Although this is more fruitful to the lower end of the market, it will create momentum and prevent subdued transaction volumes in the liquid core market from £500k – £3m in central London.

“Another way the chancellor could show some ingenuity would be to incentivise downsizers and homeowners looking to restore and refurbish unmodernised empty properties.  Domestic families looking to downsize hesitate due to the front-loaded buying costs, so by creating some downsizer relief this would naturally create more of a buying cycle and free up much-needed family homes. Currently, buyers brave enough looking to undergo extensive work have a VAT benefit of 5% on renovations for properties that have been empty for two years or more. Reducing this window to say 1 year would create impetus for end users to take on full projects in a market where turnkey stock is heavily undersupplied.”

Hopes: “The aftermath of the chancellor’s NonDom reform changes, specifically on the IHT 10-year tail, has caused the exodus of millionaires that has dominated headlines in 2025. NonDoms exposed to UK inheritance tax on their worldwide assets along with additional stamp duty surcharges have been the kiss of death in terms of sentiment. The biggest issue is some people may relocate but are not in a rush to sell their high-value assets and are opting to retain these homes in their portfolios, thus creating even more pent-up inventory. The total buying costs for an overseas buyer are now maxing out at 19% and with stock levels increasing, they are in the driver’s seat to sit back and be discerning.”

It is unlikely that the Chancellor will take pity on landlords

– Mark Harris, chief executive of mortgage broker SPF Private Clients

“The obvious choice perhaps for boosting transactions in the housing market is reform of stamp duty. The government is keen to support first-time buyers as demonstrated with the continuation of the albeit rebadged Mortgage Guarantee Scheme, so not extending the current stamp duty concession, which ends on 31 March, is a little surprising. Perhaps consideration of a revised scale for first-time buyers will be revisited and if it isn’t, then it should be.

“First-time buyers are strapped for cash and face a big enough struggle to pull together a deposit – shelling out thousands of pounds on stamp duty on top is a disincentive to buying. And if we don’t have enough first-time buyers, which are the lifeblood of the market, those transactions higher up the ladder which are dependent on having a first-time buyer at the bottom, won’t happen either.

“At the other end of the scale, an incentive – again, most likely stamp duty reform – for those seeking to downsize would be helpful. Many properties are under-occupied by older borrowers who want to downsize but face too many barriers to doing so. Scrapping stamp duty for this cohort may lead to more supply to the property market.

“Housebuilding is said to be very important for this government, as indeed it has been for every other. With the drive to build 1.5mn properties, perhaps a revised version of Help 2 Buy could be considered. While the scheme had its detractors, it did incentivise builders to build as well as offering assistance to borrowers so that they could obtain finance.

“While landlords may feel they have been politically targeted and financially beaten enough, it is unlikely that the Chancellor will take pity on them and reverse any recent moves. With Reeves caught in a sticky position, either having to cut back on spending or raise revenue, she may look at changes to capital gains tax. This was left unchanged in the Budget, despite fears that it could increase considerably on property sales. If noise is made around increases to CGT, this may encourage further amateur landlords to sell up.”

An extension of the enhanced SDLT thresholds would be beneficial

– Lisa Simon, Head of Residential, Carter Jonas

“An extension of the enhanced Stamp Duty Land Tax (SDLT) thresholds would be beneficial as it supports first-time buyers and stimulates broader market activity. Furthermore, an in-depth review of SDLT is warranted. The current structure has significant jumps at higher property values, which can disproportionately affect the housing markets across different regions. In some areas, high-value properties represent a significant portion of the market. Adjusting the step changes in SDLT for these properties could enhance their appeal and help unlock movement in this segment of the market.

“Recent changes to non-domicile tax rules have created significant market uncertainty. Easing some of these rules may encourage greater overseas or international investment in the prime property sector.

“Additionally, an adjustment to Capital Gains Tax (CGT) could motivate homeowners to sell, thereby increasing market supply. Specific CGT relief for certain prime properties, such as those that have been recently renovated, could also be beneficial.”

The Chancellor needs to signal to international investors that the UK is still the right place for them to work, invest and ultimately pay tax

– Liam Monaghan, Managing Director of LCP Private Office

“Having spent the last few weeks travelling in Asia, it is apparent that the Chancellor needs to signal to international investors that the UK is still the right place for them to work, invest and ultimately pay tax. Once you encourage one individual, the rest will follow. If she continues to grab for higher percentage points on Income tax, SDLT, CGT and IH, it will further chase away HNW individuals from the UK, having the opposite effect. Something that could make or break their premiership.’’

What measures could the Chancellor announce in a Spring Forecast Statement that would bolster the property market?

  • “Tax reform – Reviewing the current systems for stamp duty, inheritance tax and CGT and ultimately reducing rates would help unlock the market, particularly for BTL investors who have faced an ever-growing number of challenges, regulations and increased financial responsibilities which have discouraged growth in this sector.
  • “Addressing issues in the Planning system – Simplifying and expediting the planning process to allow developers to bring new high-end residential projects to market more quickly, as well as introducing measures to encourage the construction of more high-end properties in PCL to meet demand, such as incentivising developers and relaxing certain building restrictions.
  • “Introducing measures to help speed up the conveyancing process to increase transaction levels and generally improve the efficiency of the market. Measures might include enhanced digitalisation and automation of the system, streamlining the local authority search process, encouraging the use of technology more in the legal sector and even setting a transaction deadline policy.
  • “Measures to promote domestic investment – such as tax incentives, or a government led scheme akin to Help to Buy but for luxury property, to attract more domestic high-net-worth individuals to buy in Central London.”

Which policies could (or already are) doing most damage to the high-value residential property sector?

  • “Increased stamp duty rates, particularly for properties over £1.5 million, have pushed up transaction costs significantly, discouraging both domestic and international buyers from entering the market or making multiple transactions. The 2% surcharge for non-UK residents has had significant impact in reducing the attractiveness of the PCL market and deterring foreign investment. It has also created the perception that the UK is becoming less welcoming to international investors, driving them to look to other more advantageous jurisdictions for investment opportunities.
  • “Reduced tax relief on mortgage interest payments for buy-to-let landlords and the additional stamp duty surcharge on second homes have significantly negatively affected the rental and investment markets in PCL, disincentivising new investors from entering the market and leading many historic landlords to sell up. This in turn only negatively impacts the rental market from a tenant perspective, as a reduction in stock leads to higher rents, limited choice and high competition amongst renters.”

The time approaching every budget is full of uncertainty and sometimes anxiety

– Claire Whisker, founder of property advisor platform First In The Door

“The time approaching every budget is full of uncertainty and sometimes anxiety. There are often rumours of what may or may not happen, as regards property, most of which doesn’t happen. This year the fear is more tax aimed at either property directly through the recently mentioned wealth tax, or more tax or costs associated with the transitional costs of moving. For a lot of people in the higher price bands the escalating stamp duty table means 19% additional cost on top of the purchase price, and that is before lawyers fees, agents fees, removal costs etc.. Any change that adds more burden to the cost of moving we think will be detrimental to all levels of the market.

“In terms of hope – we always hope for the aforementioned to be reversed, so that the market starts to flow again, but this current government may not see the long term benefits of this policy in terms of the extra revenues generated by allowing people to buy and sell more freely.”

The reality is that without bold action, the market will continue to stagnate

– Alex Macaulay, MD at property developer Kinland

“The property market has long been held back by the same structural issues, yet little has been done to address them. If the Chancellor is serious about revitalising the sector, Stamp Duty Land Tax reform must be a priority. It remains the biggest obstacle to a dynamic, fluid market—discouraging transactions and making high-value residential property less accessible. Equally, we need to reconsider how we treat international buyers. For too long, they’ve been pushed away by punitive surcharges and an increasingly hostile tax environment, which has significantly weakened demand in the prime sector.

“Inheritance tax is another antiquated regime that stifles long-term investment, adding unnecessary complexity to an already convoluted system. Instead of policies that encourage growth, we’ve seen layers of taxation that make the market less attractive to both domestic and international buyers. The reality is that without bold action—whether through tax simplification, incentives, or a more welcoming approach to global investment—the market will continue to stagnate. Unfortunately, history suggests that rather than meaningful reform, we are more likely to see minor tweaks at best, or further taxation at worst, as the government looks to fill its coffers rather than support the real estate sector.”

Restrictive rules still prevent many smaller housebuilders from accessing the loans they need

– Wayne Douglas, MD at City & Country

“The recent extension of the Home Building Fund for SMEs is a step in the right direction, but restrictive rules still prevent many smaller housebuilders from accessing the loans they need. This scheme alone isn’t enough. The Government must go further by offering zero or low-cost finance through Homes England, available to all SMEs, not just those rejected by commercial lenders.

“This could really level the playing field, taking away an unreasonable level of risk to make smaller, potentially more tricky schemes, like urban brownfield sites and empty retail spaces, into viable projects for smaller housebuilders, that would never be of interest to the largest players.

“Without suitable finance support from the Government, these sites will remain untouched, and the Government’s 1.5 million homes target will be out of reach.”

Clarity is required on key tax policies, including non-domicile status, Inheritance Tax, and Capital Gains Tax

– Marco Previero, Co-Founder and Head of Research at R3Location

“The government should prioritise policies that lower transaction costs to encourage investment and stability. While we do not expect this to happen, a clear commitment to reforming Stamp Duty Land Tax, for example, particularly by reducing rates for prime and super-prime properties, would provide much-needed stimulus to a market that has stagnated over the past year.

“Clarity is also required on key tax policies, including non-domicile status, Inheritance Tax, and Capital Gains Tax (CGT), especially considering last year’s budget uncertainty and policy reversals. Potential tax hikes on high-value properties, such as increased annual property taxes are a concern, but unlikely to happen this spring – the same may not hold true for higher CGT rates. I fear that the Chancellor may attempt to rebalance the current political narrative surrounding benefit reform by shifting focus onto wealthier property owners, but I hope this is not the case.

“What’s more, any adverse changes to non-domicile tax rules would only heighten uncertainty, further weakening an already fragile prime property market.”

 

Prime country house buyers are just starting to get used to a degree of what feels like relative stability, not more uncertainty

– Ross D’Aniello, Co-Founder of Midlands-based estate agency Chartwell Noble

“With the Chancellor’s Spring Forecast looming, buyers and sellers in the prime country house market across central England, the Cotswolds, are just starting to get used to a degree of what feels like relative stability, not more uncertainty.

“At Chartwell Noble, we see first-hand how uncertainty can have a detrimental impact on confidence and how tweaks to tax policy can shape sentiment.  If Rachel Reeves wants to bolster the market, Stamp Duty reform for downsizers would be the single most effective move. The current structure stifles transactions at the top end, particularly for downsizers who could free up supply. A targeted SDLT reduction for those looking to downsize – or even a holiday – would inject much-needed confidence and be beneficial.

“What we fear most is a fresh assault on property wealth. Even talk of a ‘Mansion Tax’ or higher Capital Gains Tax on additional homes would discourage investment and stagnate the market. Rural estates and landowners are already feeling sore from the impact of recent changes to Inheritance Tax relief on agricultural and development land, making succession planning more complex and discouraging long-term investment. If the government tightens these rules further, it risks further undermining rural property values and land supply.

“Equally damaging would be more punitive levies on overseas buyers, which could deter demand for best-in-class properties. The prime property sector is a major driver of economic activity beyond just sales. More tax isn’t the answer, liquidity is. The Chancellor should focus on encouraging movement, not penalising those who want to transact.”

Changes to non-dom tax status are already having a detrimental impact on the prime property market

– Henry Lumby, Chief Commercial Officer at Auriens

What measures could the Chancellor announce in a Spring Forecast Statement that would bolster the property market? “One of the most effective ways to stimulate the prime property market would be to reform Stamp Duty. The current high rates of Stamp Duty have significantly contributed to stagnation in the London property market over the past decade, discouraging transactions and limiting real growth. A targeted reduction, particularly for those downsizing, would incentivise homeowners to move from properties they are under-occupying, freeing up larger properties and increasing overall market activity.”

Which policies could (or already are) doing most damage to the high-value residential property sector? “The proposed changes to non-dom tax status, coupled with the lack of detail since the Budget, are already having a detrimental impact on the prime property market. The uncertainty surrounding these changes has deterred international buyers, leading to lower transaction volumes and a slowdown in the prime London market. This hesitation is not only affecting property investment but also wider economic activity. The policy is counter to the Government’s stated aim of driving economic growth and is ultimately reducing tax revenues, with HMRC already seeing a decline in Stamp Duty receipts.”

 

While a cut to SDLT across the board is highly unlikely, it would significantly stimulate market activity

– Peter Greatorex, Managing Director, Peter Greatorex Unique Homes

“As with any fiscal forecast, there is always an opportunity to support the prime property market by reassessing Stamp Duty Land Tax (SDLT). While a cut to SDLT across the board is highly unlikely, it would significantly stimulate market activity, benefiting both buyers and sellers by reducing the upfront tax burden and improving market fluidity. Additionally, the recent increase in SDLT for additional properties from 3% to 5% is already deterring investment in the rental sector, exacerbating supply shortages and driving up rents. A more balanced approach would encourage investment, supporting both the sales and lettings markets. Furthermore, targeted incentives for urban property development, particularly in historic cities like Bath, would provide a further boost by supporting the refurbishment of existing buildings and the construction of high-quality apartments to meet growing demand while preserving architectural heritage.

“Most damaging would be further increases in SDLT for high-value properties, which would dampen market activity and potentially lead to reduced transactions and stagnation in the sector. The super-prime market has already seen price corrections, and additional tax burdens would only accelerate this trend. Moreover, recent changes to taxation for non-domiciled residents risk discouraging international investors who have long played a crucial role in the UK’s luxury property sector. While ensuring fairness in taxation is important, maintaining policies that attract global investment is essential to sustaining the health of the prime residential market.”

Talking Heads: What does the end of non-dom status mean for the prime property market?

By PrimeResi Journal

As Britain’s 225-year-old ‘non-dom’ tax regime faces abolition, we asked prime resi insiders about the potential impact on the property market and their businesses.

Non-domiciled status came into being back in 1799, in response to the growth of the British Empire around the world. It meant British subjects living in far-flung colonies did not have to pay taxes in the UK.

More recently, it’s been the preserve of globe-trotting super-rich who like to spend time – and own assets – in London.

Current rules – which will end in 2025 – mean those registered as non-domiciled with HMRC pay no UK tax on overseas income and capital gains, unless the money is brought into the Britain or deposited in a UK bank account. The status can last for up to 15 years, although a £30,000 annual fee applies after seven years.

Some 68,800 non-doms were registered with HMRC in 2021-22 – slightly lower than the three-year average to 2021 of 70,800.

The tax exempt status has been roundly criticised for decades, with deep reform or abolition becoming a staple of Labour and other opposition party manifestos. The system has been tinkered with over the years, including a significant overhaul on George Osborne’s watch in 2017, when permanent non-dom status was abolished.

Rishi Sunak’s Conservative government ran with Labour’s long-playing idea in this year’s Spring Budget, when it was announced that non-dom status will be entirely replaced with a “modern, fairer, simpler” system based on residency from April 2025. This will involve a four-year tax-free period for relevant new arrivals to the UK, after which standard full-rate income taxes will apply.

Keir Starmer’s team responded with a few more details on its proposals, including the closure of various loopholes left open by the Tory reform.

Now both the Conservative and Labour parties have pledged to end non-dom tax breaks in their current form. Politicians on both sides of the House of Commons agree that reform would generate billions of pounds of extra revenue for HM Treasury, which Labour says could be spent on health and education, and the Tories want to help fund a cut to National Insurance.

“While bringing in an extra £2.7bn a year for public services by 2028-29, our new simpler system will remain internationally competitive to attract the best talent to the UK,” explains a spokesperson for the Treasury. “New arrivals will benefit from 100% relief on foreign income and gains for their first four years as a UK tax resident, and there will be transitional arrangements in place for current non-doms.”

Despite these assurances, some pundits believe ending non-dom tax breaks will result in fewer High Net Worth Individuals living in and investing in Britain. A number of leading economists, meanwhile, expect the effect to be negligible. Research by the London School of Economics and University of Warwick, published in 2022, suggested that doing away with non-dom status would lead to just 0.3% of “remittance basis users” exiting the UK (that’s 77 people), while at least £2.4bn in extra tax revenue would be generated.

Talking Heads

In light of next year’s planned changes, we asked a panel of prime resi insiders:

  • What effect, if any, will ending non-dom tax exemptions have on the UK’s prime property market?
  • Have any of your clients already made moves or stated intentions to change their lifestyle or property ownership status as a result of the tax reform?

“There are no positive takeaways” to proposals to end the non-dom tax regime, argues buying agent Camilla Dell, while super-prime developer Matthew Robertson says changes “are bound to have a negative impact” on both the London proper market and wider UK economy.

But others – perhaps the majority – in the property industry are more sanguine. “I can’t see this stopping much activity,” says buying agent Jamie Freeman, while The Buying Solution’s Will Watson reports clients are generally willing to pay premiums for the quality of life that London provides. Shaun Drummond of Harrods Estates believes “wealthy international buyers have already factored in changes to the non-dom status,” so there should be little fallout to its removal.

As Rosi Walden of DDRE Global and Grant Bates of the Hamptons Private Office both point out, there’s more to living in the UK than tax rates.

 

There are no positive takeaways

Camilla Dell, Managing Partner at buying agency Black Brick

“There are no positive takeaways with either the Labour or Conservative Party proposed changes to the UK Res Non Dom regime and undoubtedly these changes will cause some UK Res Non Doms to leave the UK in search of more tax friendly jurisdictions and deter some wealthy people from relocating to the UK. Four years simply isn’t long enough for families to settle. However it remains to be seen what effect the changes will have on PCL property pricing. Quitting the UK doesn’t necessarily mean a property gets sold in the process. And some UK Res Non Doms who have been in the UK for many years and built a life here may decide to swallow the changes as their lives and their families lives would be too disrupted by leaving.”

 

Many have been spooked, not just by the proposed tax changes but the constant shifting of the UK tax landscape

Ollie Marshall, director of buying agency Prime Purchase

“Prior to the Chancellor’s announcement in the Spring Budget regarding non-doms, we expected some change, perhaps along the lines of the Italian system, whereby the government increased the annual levy. This would have been a sensible solution, increasing the tax take while also minimising the damage done.

“The Conservative solution seemed to wrongfoot many clients and tax planners. The initial reaction to the proposals was certainly negative but potentially had workable elements. However, no sooner had that been digested, then up pops Labour’s version.

“The tipping point or deal breaker with this for most non-doms is inheritance tax on trusts. However, it is difficult to plan for any of this until we see the legislation and outcome of the election as much of this may be pre-election rhetoric – what comes out in the wash may be more balanced with consultation. Without consultation, an undiluted Labour proposal would have huge implications, none of which would be positive.

“The advice is to wait and see. Make plans by all means but don’t make decisions as the reality might turn out not to be as bad as you think.

“Many have been spooked, not just by the proposed tax changes but the constant shifting of the UK tax landscape. Not only are there significant professional fees to pay in order to adapt and change, these people feel unwelcome and are saddened by that.

“While there is uncertainty and concern, we haven’t lost clients or deals over it yet. One of the biggest markets for us in central London is US buyers where there are a multitude of push factors: increased tax, gun crime, and a very polarising election. US buyers will be relatively unaffected by Labour’s proposed changes because of international tax treaties.”

 

Changes to the non-dom regulations are bound to have a negative impact

Matthew Robertson, co-founder and CFO of property developer Valouran

“The impact of these changes will be felt not only in the UK’s prime property market, but in the wider economy as a whole. In this recessionary environment we ought to be finding ways to stimulate economic growth, and one way to do that is to encourage international entrepreneurs to base their business and domestic lives here in the UK. Corporation tax rates have recently increased by nearly a third, a move which will serve to discourage business to base themselves here, and the changes to the non-dom regulations are bound to have a negative impact also.

“We are aware of a prospective European buyer who has very recently changed their plans to acquire an apartment in PCL directly as a result of these changes to the non-dom regulations.”

 

The prestigious British education system is a critical factor

Jo Eccles, Founder and Managing Director of prime central London buying agency Eccord

“We have had many conversations in the last few weeks with wealthy clients who have indicated their concern over the impending changes to the non-dom tax rules.

“Some are reviewing the tax regimes in locations such as Italy and Dubai with a view to relocating, but the prestigious British education system is a critical factor in their decision making.

“Because of our excellent schools, many wealthy families with children are reluctant to leave London altogether. Instead, we could see them choose to enrol their children into British boarding schools – rather than day schools – and base themselves elsewhere, in the process swapping their super-prime London mansion for a smaller London bolthole.

“This could result in non-dom demand for £30mn – £40mn properties being replaced with more modest £10mn – £15mn properties.”

 

I can’t see this stopping much activity

Jamie Freeman, Director at buying agency Haringtons UK

“Abolishing non-dom status, over time, might make some UHNW international buyers think twice about living and investing in the UK, but ultimately, I can’t see this stopping much activity because the country is still seen as extremely desirable by many across the globe.

“Despite recent economic and political change, London and the UK will always remain an attractive place for international buyers and investors given its geographical position between Europe and the US, cultural capital and relative stability.

“However, a word of caution; non-doms are by definition mobile so although the UK in an attractive place to live, they don’t have to stay because they have property elsewhere. Non-doms after all spend a huge amount of money on staff, living costs and yes, their gold cards, so having them in the UK is sensible because they will only go and live somewhere else.”

 

If you want the best of anything in life, it’s expensive and therefore living in the UK should reflect this and people will accept

Will Watson, Head of London at The Buying Solution

“We seeing a number of buyers currently taking advice on how they can get a “workaround” as very much want to make London their home. The key drivers for our market here are business and education for their children. Fastly followed by being English-speaking.

“Quite simply, my UHNW clients do not want to live, educate their children or have their business in mainland Europe or Dubai. One of my clients summarised it perfectly ‘London is the greatest/best city in the world’. If you want the best of anything in life, it’s expensive and therefore living in the UK should reflect this and people will accept. It will continue to attract the worlds wealth and talent.”

 

Even for those who decide to leave, most will hold onto their property

Mark Lawson, partner at The Buying Solution

“It is important to remember the proposed amendments will not kick in until 6th April 2025, i.e. after a General Election. So, the proposals as they stand could well change before they are implemented.

“From a country house market perspective, at the top end over £10million, I don’t think it will have a vast effect as only a small proportion of the market are bought by those not domiciled here in any case. Also from experience given their rarity, when a trophy, best-in-class house or estate becomes available, there will always be buyers and demand. The UK remains an attractive place for many reasons, and that will not change. Good schooling, great culture, pleasant climate, good time zones to do business east and west, etc. Alternative destinations such as Monaco, Switzerland, Dubai, and the Caribbean sound attractive, but they don’t offer what the UK does.

“Those buyers who are not domiciled here usually own or buy a country property to enjoy for specific reasons, for example they come to the UK for the summer months to avoid the heat in their own country (in the case of Middle Eastern buyers) or to enjoy the shooting season (in the case of many US buyers) and these buyers will still benefit from the 90 day/night exemption. There are currently no proposals to change the tax regime that will impact individuals domiciled abroad.

“Even for those who decide to leave, most will hold onto their property as they can still use them for 90 days a year, and they provide a safe haven to return to if required and a secure investment in a diversified portfolio. I think non-doms will simply change the way they use their UK homes. I suspect they will come here less, limiting their time to their 90 days when they can.

“Meanwhile for young families who have made their homes here, they have children happy at good schools and have made friends so are less likely to sell and move away.”

 

Wealthy international buyers have already factored in changes to the non-dom status

Shaun Drummond, residential sales Director at Harrods Estates

“The new laws are going to bring the UK into line with what is happening generally in advanced economies elsewhere around the world and we are aware of international buyers that have been preparing for potential changes in this kind of legislation for many years now. Wealthy international buyers have already factored in changes to the non-dom status so ultimately, we don’t think this will have much of an impact to the Prime Central London market in the foreseeable future.

“For many UHNW individuals, the Corbyn vs Johnson election of 2019 brought to light the stark reality of just how quickly things could change against their favour. While Labour did not win that election, ever since vendors, buyers and family offices have been working with their international tax advisors to ensure that their assets are protected should any changes arise in the future. Savvy international family offices are always looking at what could happen in the next five to ten years, not the next 12 months.

“Ultimately London will always remain an attractive place for UHNW international buyers, either as an investment or personal use. World class schools and universities, culture, relative political stability, and it’s time zone between Europe and the US ensure that London remains very high up on the list of desirable global cities for international buyers.”

 

The UK prime property market is influenced by a range of factors beyond tax policies

Rosi Walden, Advisor at DDRE Global

“Whilst there is much talk of whether the end of the non-dom status will drive wealthy property owners out of the UK, it is important to understand that the UK prime property market is influenced by a range of factors beyond tax policies. Our clients are very international, and whilst some choose to optimise for tax efficiency, many choose to prioritise other factors, such as security, quality of life and culture, all of which the UK provides in abundance. It will be interesting to see if the UK follows in the footsteps of the US or Switzerland, with different tax rates in different cities.

“It’s certainly something that my clients are thinking about, however everyone’s priorities are different. For example, I have one client, who is already based outside of the UK, who is looking to sell his apartment in London to reduce ties to the UK for tax reasons. On the other hand, I have several clients (British and international), who have not changed their plans.”

 

London’s prime property market has never been predicated solely on its tax advantages

Grant Bates, Head of the Hamptons Private Office in London

“The cessation of “non-dom” tax status in the UK has undoubtedly sent ripples through the prime property market. This change has prompted a recalibration of the decision-making process for prospective buyers, with some re-evaluating the timeliness of their investments.

“London’s prime property market has never been predicated solely on its tax advantages. The capital’s rich cultural heritage, distinctive architectural styles, world-renowned educational institutions, and huge range of pubs, restaurants and theatres continue to be potent drawcards. Consequently, while the tax exemptions’ cessation may deter a segment of the market, it is not anticipated to be a deterrent for the majority. These buyers are not primarily motivated by tax optimisation when acquiring a London residence. Furthermore, it is worth considering that political pledges, such as those proposed by the Labour Party, often undergo significant metamorphosis from manifesto to implementation. Thus, many clients remain steadfast, viewing the broader picture beyond tax concessions. In a manner akin to their approach to stamp duty, our affluent clientele are likely to adapt and proceed with their transactions, undeterred by the changing fiscal environment.”

 

It’s essential not to fall into the trap of complacency with the mindset that ‘London is London’

Vic Chhabria, Founder of London Real Estate Office

“Many aspects that once attracted foreign wealth to London and boosted the economy, have been altered in recent years. Most recent is the prospective end of the ‘non-dom’ tax status announced by both parties.

“This does carry some level of risk. Industries such as private education, investment, fashion, hospitality, travel, and property, which thrived on affluent non-dom residents, are likely to feel the impact. While the current and potential future governments believe that removing this status will bring in around £2.7 billion, they haven’t fully considered the losses these industries will face.

“It seems the government is attempting to appease the majority of voters with promises of taxing the wealthy to secure votes, without fully disclosing the inevitable costs and drawbacks which can occur with this.

“While I have confidence that London can maintain its global allure thanks to its strong economy, cultural diversity, educational prestige, connectivity, architectural heritage, and more, it’s essential not to fall into the trap of complacency with the mindset that ‘London is London’.”

 

Many of our clients, especially those from Asia, are now reevaluating their portfolios

Jon Johnson, Managing Director at estate agency Johns&Co

“Following a tour of our Asia offices in Hong Kong and Shanghai, where I met with numerous clients, it’s clear that the forthcoming abolition of non-dom tax exemptions could potentially make the UK less attractive for some international investors. Many of our clients, especially those from Asia, are now reevaluating their portfolios, with some considering selling their UK properties or accelerating their residency plans to capture the current tax benefits before they end. However, it’s evident for most that London will continue to hold global appeal due to its enduring attributes such as political and legal stability, long-term capital growth, and significant ongoing infrastructure projects enhancing value across the city. It does however underscore the need for strategic financial planning and professional guidance to navigate these changes effectively.”

 

Parts of the prime housing market will remain price sensitive for a little longer

Lucian Cook, Head of Residential Research at Savills

“[The removal of the non-doms tax regime] is of most relevance to the markets of central London and the private estates of the Home Counties where international, high and ultra-high net worth demand is most prevalent.

“In these markets, the initial reaction from some in the midst of a potential purchase is likely to be followed by a period of more sober reflection, as those affected weigh up their revised tax position against other more practical consequences of changing their life plans.

“In reality, such deliberations were inevitable at some point, given that non-dom taxation was firmly in the sights of the opposition. Essentially then, they have been brought forward and will take place with the benefit of a number of transitionary arrangements and concessions that might not otherwise have been made available.

“No doubt it will mean these parts of the prime housing market will remain price sensitive for a little longer.

“Politics will mean they are slower than the more domestic, prime housing markets to feel the benefit of an improving economic environment. Philosophically speaking that is.”

 

The abolition of these tax advantages could mark the end of a chapter

Jerome Lartaud, co-founder and director of property buying agency Domus Holmes Property Finder

“In my opinion, abolishing the non-dom tax benefits is likely to dampen demand from international buyers and investors, particularly within the Prime Central London market. This potential outflow of wealth could have ripple effects across the UK’s prime and super prime property sectors, impacting property values and market dynamics. However, it is very difficult (and too early) to predict what effect it will really have and to what extent.

“Historically, London has been renowned for being one of the top destinations in the world for the super wealthy to park their wealth by acquiring prestigious assets. Non-doms have avoided paying UK tax on their foreign income and capital gains, provided that money is not brought into the UK. This system has particularly benefited wealthy individuals with international ties, enabling them to significantly reduce their tax liabilities while living in the UK.

“The abolition of these tax advantages could mark the end of a chapter, and some experts predict that the abolition of the non-dom status will prompt a significant exodus of HNWIs from the UK to jurisdictions offering more favourable tax regimes, such as Dubai, Switzerland, and Singapore – all known for their low-tax environments and supportive policies for business growth and wealth preservation.”

Buying agency Black Brick rolls into the West Country

Mayfair-based firm adds new recruits to cover Cornwall, Devon, Dorset & Somerset as part of regional expansion strategy.

Property buying agency Black Brick has set up a new arm covering locations across the West Country.

The Mayfair-based firm’s new country and coast department, launched to coincide with this year’s spring market, will be overseen by two new recruits – both of whom will be based out in the field.

Anna Sharp will be representing Cornwall, while Rupert Stephenson will be heading up Devon, Dorset and Somerset.

Sharp brings over a decade of experience in the prime Cornwall market, having started her career at Savills before moving over the buying side with Recoco. She is also currently working on her fourth renovation project in Falmouth.

Stephenson started out in property in Central London in the late 1990s, before going on to cover the markets of Surrey, Sussex, and Hampshire – and specialising in the prestigious St George’s Hill. After twenty years of running his own land and estate agency, he also started renovating properties and relocated to the Devon countryside, transforming a farm and outbuildings overlooking Dartmoor.

 

 

Founded by Camilla Dell in 2007, Black Brick is one of the best-known buying firms on the PCL property scene, and has advised on over £2bn worth of transactions to date. The coverage also includes the Home Counties and the South East, and there are plans afoot for an expansion into other regions over the coming year.

More traditional conditions have resumed in the South West market since the end of 2022, said the firm, with a higher proportion of properties being sold off-market due to a lack of demand, making it “hard to navigate” for new buyers.

Camilla Dell: “After an incredible start to the year, we are delighted to expand into the West Country with the addition of Anna and Rupert, who will be a tremendous asset to us. This is a pivotal moment for the firm as we expand outside of London and the South East for the first time.

“I’ve chosen these areas first, in an operation to rollout into other parts of the UK over the next 12 months, as I believe they will have a revival of popularity. With the need for buying agents growing, particularly in popular rural and coastal areas where stock is limited, we are now expertly placed to assist buyers looking to relocate or buy a second home in some of the UK’s most.

“As the world continues to get hotter with global warming, summers in Europe are becoming unbearable for many, and we believe staycations will become more appealing for those wanting a holiday without the extreme heat. Cornwall and Devon are areas of outstanding natural beauty and offer buyers the perfect blend of stunning natural landscapes, rich cultural heritage, an amazing food scene and a relaxed coastal lifestyle. Anna and Rupert are highly experienced and talented buying agents and I have no doubt will make a huge success of their roles as Regional Directors for Black Brick West Country.”

Anna Sharp: “Now is a fantastic time to buy in the South West. With demand in the prime, particularly coastal areas being fairly low, coupled with interest rates at a more reasonable level, we have a high number of off-market properties up our sleeves to offer buyers. On average, last year, Rupert and I sold 60% of properties off-market for clients.”

Rupert Stephenson: “The West Country has always attracted second homeowners and, despite recent adverse tax adjustments for holiday homeowners announced in the March budget, demand in the second home market remains strong with buyers still actively seeking holiday homes in the West Country this year. With the advent of working from home in recent years, this has offered much more freedom to buyers who, up until the pandemic, were mainly tied to their offices with the weekly commute into London and the big cities.

“We have acted for an array of clients recently who are looking for the perfect house. Interestingly these houses are often intended to be used initially as a second home, for family summer holidays and weekends away, and as ‘lock up and leave’ properties, but then with a view to moving full time to the West Country.”

‘Another missed opportunity’: Prime property industry reactions to the Spring Budget 2024

Featuring insights from: Black Brick, Chestertons, Fine & Country, Harrods Estates, Heaton & Partners, Jackson-Stops, Janine Stone, Knight Frank, Lomond, London Central Portfolio, Propertymark, Robert Irving Burns, Savills, SPF Private Clients, Winkworth, Zoopla and more

By PrimeResi

The property industry seems underwhelmed by this year’s Spring Budget. Chancellor Jeremy Hunt set out a suite of tax tweaks and spending pledges, but stopped short of pulling any blockbuster moves.

Jackson-Stops boss Nick Leeming suggests Hunt took “a rabbit in headlights approach”, rather than the traditional rabbit-from-a-hat trick that Chancellors are won’t to perform on Budget day. Knight Frank’s research chief Tom Bill talks of “shrugged shoulders”; Zoopla, Propertymark and SPF Private Clients agree it was a “missed opportunity”, while “disappointment” in some form crops up in a large proportion of the comments below. More robustly, property consultancy Bidwells says “the absence of measures to address the national housing emergency is astonishing.”

Announcements that did garner some excitement include a widely-anticipated change to Non Dom status (replacing it with a four-year tax break on any overseas income), a reduction in Capital Gains Tax on residential property (which has been roundly welcomed by the sector), and the removal of tax breaks for holiday rentals and for portfolio acquisitions.

There’s widespread chagrin – but not surprise – that Stamp Duty was not changed in a meaningful way, while many lament a general lack of support for and innovation on housebuilding.

Talking Heads: Prime property industry reactions to Jeremy Hunt’s 2024 Budget statement

‘Anyone planning to get on the property ladder would have shrugged their shoulders following this Budget’ – 

Tom Bill, Head of UK Residential Research at Knight Frank

“Anyone planning to get on the property ladder would have shrugged their shoulders following this Budget. Demand-side incentives for first-time buyers such as stamp duty breaks or help for those with smaller deposits would have been welcome, particularly as mortgage rates and house prices are creeping back up. We may discover later this year if the government intends to offer more support to buyers, whose mobility around the UK is vital for an economy that is firing back up after Covid.”

 

‘The abolition of multiple dwellings relief is likely to temper investment among landlords’ – 

Lucian Cook, head of residential research at Savills

“Today’s budget has bigger implications for private landlords and second homeowners than current and aspiring homeowners. The abolition of multiple dwellings relief is likely to temper investment among landlords, while the targeted cut in capital gains tax on residential properties may tip the balance for a few landlords who have questioned their ongoing investment in the sector.

“That won’t do much for rental supply, in combination with changes in rental regulation. But neither will it necessarily make it substantially easier for people to get on the housing ladder.

“Without any specific measures to help first-time buyers, it may well accelerate the restructuring of the buy-to-let sector to bigger, less mortgage-dependent landlords, as much as opening up stock to those looking to get a foot on the housing ladder.”

 

‘The reduction in CGT is helpful and a step in the right direction to get the market moving’ –

Camilla Dell, Founder and Managing Partner at Black Brick

“The reduction in CGT is helpful and a step in the right direction to get the market moving. Many property owners have seen significant gains on their property investments/second homes (bear in mind there is no CGT when selling your primary residence). So, the benefit will be restricted to sellers who have made gains on properties such as investments, second homes/holiday homes. I’m not sure the change really addresses the bigger issue; namely people downsizing and weighing up the costs of moving, with stamp duty being the biggest deterrent. Someone downsizing from their primary home will see no benefit from this change. So, I think the effects will be limited and mainly benefit investors and foreign owners of property.

“The abolishment of SDLT relief on multiple dwellings is also shortsighted. Many of our buy to let clients purchase 6 or more properties and benefit from lower rates of SDLT as a result. They are providing much needed rental supply into the market and without this tax break it is yet another deterrent towards investment into the private rental sector. Not good news for tenants as fewer Landlords results in higher rents.”

 

‘Is there going to be a flurry of sales from landlords because they will make a saving on capital gains tax?  No.’ – 

Mark Harris, chief executive of mortgage broker SPF Private Clients

“More stimulus for the housing market is desperately needed to boost transactions and social mobility, so this Budget was a missed opportunity. While there has been some recovery in the housing market since the start of the year, it is still quite subdued and getting on the housing ladder is so difficult, particularly in higher-value areas such as London and the southeast, unless you have access to a significant deposit.

“Is there going to be a flurry of sales from landlords because they will make a saving on capital gains tax? No, they are in it for long-term gain, capital appreciation combined with income yield. Of course, that yield has been hit hard with higher interest rates and more regulation, as well as the inability to offset mortgage interest but professional landlords are committed and not going to start selling because of a slight reduction in CGT. Perhaps with rents so high the last thing we need is a reduction in homes to rent anyway?

“The abolition of the furnished holiday lettings regime was expected – it levels the playing field with other landlords and is better for local communities.

“The cut in National Insurance could benefit mortgage borrowers. Someone earning £30,000 a year would see a net gain of £610 per annum; if they used that money to overpay their mortgage by £50 per month, the mortgage would be paid off nearly three years early, saving more than £10,000 in interest [based on a £130,000 mortgage over 25 years at a rate of 4.5 per cent paid back two years and nine months early, saving £10,980 in interest].”

 

‘Another missed opportunity’ – 

Richard Donnell, Executive Director at Zoopla

“The budget marks another missed opportunity to take action on boosting supply and mortgage availability in the housing market.

“The consensus is that the country needs more new homes. Supply has increased but this has stalled. There is a need for widespread reform of the planning system to encourage supply. More funding is needed for social and affordable homes, and housing infrastructure investment to unlock supply.

“The Government should also look to support the emergence of a long-term fixed rate mortgage market as a matter of urgency. This will help more young people with smaller deposits access home ownership – particularly in southern England where deposit size is the biggest barrier to getting on the housing ladder.”

“Another missed opportunity is the decision not to make the £625,000 threshold for first-time buyer relief permanent. This means 30% more first-time buyers will be liable to pay full stamp duty from March next year.”

 

‘We would have liked to have seen the Chancellor make adjustments to stamp duty’ – 

Richard Davies, Director of UK Operations at Chestertons

“For the past two decades, the government has declined to align the Inheritance Tax threshold with rising property values, which has made it a highly outdated levy. Despite speculations that the Chancellor might announce raising the IHT threshold, it is a tax that only affects 4% of the population so was probably considered too much of a gamble ahead of the general election.

“Stamp duty is a major financial burden on buyers that has seriously restricted the freedom with which people can trade up and down to fit their personal circumstances. To make it more economically viable for people to move home as and when their circumstances require, we would have liked to have seen the Chancellor make an adjustment to the current stamp duty thresholds or at least introduce an exemption for downsizers and first-time buyers, which could have boosted the number of larger family homes that are being put up for sale and helped more people get onto the property ladder.

“Despite mortgage rates coming down a bit from their highs last year, rates are creeping up again and first-time buyers need all the help they can get. The Chancellor’s decision to not extend the SDLT relief for first-time buyers is disappointing news. Whilst this could lead to more first-time buyers rushing to buy a property before the relief ends in 2025, it will eventually make it that much harder for future first-time buyers to get on the property ladder.”

 

‘There was a certain inevitability about the abolition of multiple dwellings relief’ – 

Edward Heaton, founder of buying agency Heaton & Partners

“There was a certain inevitability about the abolition of multiple dwellings relief which will certainly come as a disappointment to many buyers of high value homes. Whilst disappointing, being pragmatic it is also not unfair.

“The reduction in capital gains tax upon the sale of property is certainly to be welcomed and is likely to release more stock to the market in the coming months and years.”

 

‘A rabbit in headlights approach on housing with major changes to property taxation avoided’ – 

Nick Leeming, Chairman of Jackson-Stops

“As Conservative support hits its lowest level for more than 40 years according to Ipsos polling, and with property transaction volumes at an 11 year low, many of us were rightly hopeful of a clear priority plan on property from the Chancellor today. Yet with nothing to lose, and a statement of over an hour, it seems Hunt has gone for a rabbit in headlights approach on housing with major changes to property taxation avoided. For many voters ready to hit the polls in a matter of months, the decision to not address supply issues that have been slowing down homeownership for huge swathes of the country for a number of years, could be a defining moment for the current government. If the property market is looking for a small win to be taken from today, the cut to property capital gains tax from 28% to 24% should, to some extent, increase the number of transactions particularly within the prime market.”

 

‘This Budget should improve demand although we are not sure that the Chancellor has done enough to encourage an increase in the supply of affordable homes’  –

Jeremy Leaf, north London estate agent and a former RICS residential chairman 

“Overall, this Budget should improve demand although we are not sure that the Chancellor has done enough to encourage an increase in the supply of affordable homes in particular, which is so badly needed.

“Whether changes in holiday letting arrangements and the reduction in Capital Gains Tax will prove beneficial remain to be seen.

“The government’s widely forecast cut in national insurance contributions and early realisation of its aim for lower inflation should mean mortgage costs can fall more rapidly and buyer confidence improve, which will certainly benefit the housing market.

“The reduction in CGT could encourage even more buy-to-let investors who were thinking of selling up to leave the market in case a Labour Government increases CGT again in the future. This could further reduce the availability of rental property and push up rents, making it more difficult for tenants and young people in particular.”

 

‘Disappointing that inheritance tax wasn’t a topic’ –

Liam Monaghan, of buying and investment agency London Central Portfolio

“Holiday-let tax breaks: Aligning the market for owners who benefit from holiday-let tax breaks will act as a positive for the long-let market, as currently, tenants are effectively losing out on homes to tourists. It is currently more tax efficient for an owner to rent out their properties on short-let platforms such as Airbnb. In areas with a high level of tourism, like London, it has meant that more properties have been made available for these types of lets and therefore removing them from the general long-let market.  The proposed changed should encourage these investors to return to the long-let market, therefore increasing the supply which is desperately needed. There is clearly a huge demand for long let rental properties from tenants, as rents are rising well in advance of inflation. Tenants are also offering landlords rents a year in advance in order to secure a property over somebody else.

“Abolishing multiple dwelling relief: By removing multiple dwelling relief, buyers will purely pass on increased tax to the sellers, whether it is a new developer or a home vendor.

“Non Dom and CGT: We need to stimulate the market in terms of transactions and we hope the abolishment of the Capital Gains Tax and Non-Dom will hopefully encourage this much-needed movement. International buyers coming to London and buying a second/holiday home are likely to have a strong presence around the other key global cities and may not be adversely affected by this.

“Disappointments: Although we realistically did not expect there to be any changes to SDLT for downsizers, it is something the industry needs. Whether a reduction or freeze, this would have been a great initiative to free up much needed stock at the top end of the market, which would lead to a healthy trickledown effect within the market. Especially as there has been numerous press attention highlighting how high stamp duty costs is one of the main reasons stopping them from moving. It is not just a demand problem, it is a supply issue too. Downsizers are sitting on a number of much-needed family homes. The Government could have made a real difference here, so it’s such a shame that they haven’t.

“It’s also disappointing that inheritance tax wasn’t a topic. It was something we were hoping for in the Autumn Statement and again for the Spring Budget. This would not only have been a wise and popular move for the Conservatives this close to a general election, but it would have helped the UK be more competitive on a global platform for overseas investment, helping to boost the general UK economy. It would also help build momentum in transaction volumes and price growth for the domestic market.”

 

‘Hunt’s decision to scrap the non-dom tax regime threatens to snuff out Prime Central London’s recovery’ –

Gideon Stone, co-founder of interior design agency Janine Stone & Co

“The UK prime and super-prime residential sector is one of the few points of light amid a very difficult housing market. The sector has a strong appeal, seeing a more than 5% increase in listings over the past 12 months, with particularly pronounced growth in prime London neighbourhoods, such as Highgate, Holland Park, and Belgravia. Overall, the sector’s economic contribution is significant, generating over £36 billion across some 16,000 transactions last year.

“Overseas buyers are vital to this market, accounting for 45% of purchases in Prime Central London in 2023, an increase of 6% on the previous year. As a result, Chancellor Hunt’s decision to scrap the non-dom tax regime threatens to snuff out the sector’s recovery. Too sudden or too dramatic a change in the tax system for high net wealth individuals risks transactions to grind to a halt, depriving the Exchequer of much needed revenues and the housing market of an upturn in one of its most important sectors.

“Britain is blessed with a large endowment of extremely desirable luxury properties that overseas buyers wish to purchase and the Government should think carefully before jeopardizing the future of this important sector.”

 

‘Non-domiciled UK residents face decisions about what to do’ – 

Antony Antoniou, CEO of Robert Irving Burns (RIB)

“Non-domiciled UK residents face decisions about what to do now that the non-domiciled tax status is set to end in April 2025. What those nearly 70,000 non-doms decide could have wide repercussions for the UK’s tax revenue and international competitiveness.

“It is not only super-rich business owners and heirs that benefit from the status, non-doms also include City of London bankers, lawyers and consultants. Those living off unearned income are far outnumbered by non-doms who work.”

 

‘Disappointing that the Chancellor didn’t choose to raise SDLT thresholds’ – 

Geoff Wilford, Founder of Wilfords

“It’s disappointing that the Chancellor didn’t choose to raise SDLT thresholds at a time when buyer’s general finances are stretched and mortgage rates remain high. Stamp Duty represents a considerable lump of money for many and any help would have been welcomed as it would motivate people to move.

“For downsizers, an increase to thresholds would have been particularly welcomed as Stamp Duty disincentivises this group of buyers from moving because of the cost, which in turn means many family homes are being under-occupied. Cutting the tax would make more people want to relocate to a smaller home, freeing up vital family housing stock for those looking to upsize.”

 

‘Will not ultimately make much of an impact at the upper-end of the property market’

Jamie Freeman​​​​, Director at Haringtons UK

“As with previous budgets, I don’t think that the announcements made by the Chancellor will ultimately make much of an impact at the upper-end of the property market.

“Abolishing non-dom status, over time, might make some UHNW international buyers think twice about living and investing in the UK, but ultimately, I can’t see this stopping much activity because the country is still seen as extremely desirable by many across the globe.

“Despite recent economic and political change, London and the UK will always remain an attractive place for international buyers and investors given its geographical position between Europe and the US, cultural capital and relative stability.”

 

‘We welcome the gradual phasing out non-dom tax status, rather than the sharp shock of abolishing it overnight’

Shaun Drummond, Director at Harrods Estates

“Given that a major section of our sales and lettings market is based on international buyers and landlords purchasing and investing in Prime Central London, we welcome the news that there will be a gradual phasing out non-dom tax status, rather than the chancellor inflicting the sharp shock of abolishing it overnight.

“However, this announcement comes at a time when international buyers are already paying a 2% surcharge on Stamp Duty, with those at the upper end of the market effectively taxed 17%,  so without any new relief for international buyers the impact of increased Stamp Duty in the prime central property market will continue to be felt, especially in the current high interest rate environment.

“With PCL prices are still below the peak of 2014/ 2015 and central London property now offering relative value compared to other major world cities especially when you take into consideration the current relative weakness of sterling against the dollar and the euro, any additional increases or withdrawal of relief could impact the appetite for purchasing among international buyers and drive them to consider renting, especially at the upper-end of the market.’’

 

‘Reducing the higher rate of Capital Gains Tax should inject some extra energy into the housing market’

Nicky Stevenson, Managing Director at Fine & Country

“Reducing the higher rate of Capital Gains Tax should inject some extra energy into the housing market by increasing the number of properties for sale.

“Teetering landlords unsure about whether to take the plunge and sell their property will be encouraged by this announcement.

“This should offer hope for first-time buyers who are the foundation of the property market, but have been hit particularly hard by high interest rates.”

 

‘Abolishing Multiple Dwellings Relief feels like a sledgehammer to crack a nut’ –

Matt Spencer, tax partner at Kingsley Napley LLP

“It’s clearly true Multiple Dwellings Relief has been abused, but abolishing it feels like a sledgehammer to crack a nut. While this will end the abuse of spurious “granny flat” claims, it will also prevent some legitimate investors from investing. It will now be much harder to find an investor willing to buy those four flats above a parade of shops. The negative impact of this change, however, is greatly mitigated by the ability to claim commercial SDLT rates on purchases of 6 or more dwellings, and so bearing that in mind, the measures, on balance, seem a good thing.”

 

‘The Chancellor has missed the opportunity to bring in Stamp Duty reliefs’ –

Timothy Douglas, Head of Policy and Campaigns at Propertymark

“It is pleasing to see property taxation under the spotlight in the Spring Budget and the introduction of measures to level the playing field and support more homes for people to rent.

“However, overall, the Spring Budget stops short in addressing the key issue of lack of supply in the private rented sector which is higher rates of Stamp Duty when purchasing a buy to let property. Furthermore, whilst additional funding is welcome for housebuilding, the Chancellor has missed the opportunity to bring in Stamp Duty reliefs and wider reforms to support more people to buy and sell their dream home which comes with a guaranteed boost to the economy.”

 

‘The absence of measures to address the national housing emergency is astonishing’ – 

Mark Buddle, Head of Residential Development at property consultancy Bidwells

“The absence of measures to address the national housing emergency is astonishing.

“Financing pressures and an antiquated system have squeezed badly-needed housing delivery, with rents soaring across the country due to the chronically undersupplied market.

“Whether or not we provide solutions to this problem could be the defining political question of this generation.

“Without support for housing delivery, the UK will be unable to attract workers in areas of high productivity, which will only serve to entrench stagflation, low economic growth and increase the tax burden in the long-term.”

 

‘Disappointing to see the UK property market receive the Budget cold shoulder yet again’ – 

 Ed Phillips, CEO of Lomond

“Disappointing to see the UK property market receive the Budget cold shoulder yet again following what was a lacklustre Autumn Statement.

“However, the property market has weathered a tough few months and has held firm despite many predictions of an impending collapse. We’ve also seen early signs that buyers are returning despite interest rates remaining at their highest since 2008 and this has also caused house prices to start to creep up.

“This resilient performance is no doubt why the Government has chosen to refrain from any property focussed initiative in the Spring Budget and it’s very much a case of no news is good news in this respect.”

 

‘Investment in Canary Wharf and Barking Riverside housing looks very promising’ – 

Adam Stackhouse, managing director, developments and commercial investments at Winkworth

“The Government has identified the astonishing decline in Canary Wharf as a viable property investment for the future. This substantial ‘levelling up’ fund of almost a quarter of a billion pounds is vital in re-purposing many half-empty office buildings and providing p to 8,000 homes in this area and Barking Riverside also. This looks very promising and we hope it will serve as a successful template to re-purpose increasingly redundant business districts across the UK into much needed residential homes. However, it seems clear to me that these are short term attempts to fix the problem of housing supply rather than making use of the Housing Committee to galvanise the UK into a country that builds homes to suit the needs of its population. National Insurance reduction is indeed encouraging by putting more money into the pockets of the population, but this is unlikely to be enough to get the economy moving at the right pace when housing supply is in such dire need. We continue our calls for a National Planning Team to be parachuted into local government to solve this damaging issue.”

 

‘A budget with little fanfare’ – 

Will Matthews, Head of Commercial Research at Knight Frank

“Overall, a budget with little fanfare, suggesting a gamble on more excitement this Autumn, and limited direct impact for the UK’s commercial real estate markets.

“The headline cut in national insurance was couched as an incentive to work, but as acknowledged in the reference to almost 1m current job vacancies, there isn’t all that much labour market slack left to take up.  Helpful, yes – but of itself, unlikely to have firms dusting off expansion plans.

“There were plenty of nods to growth sectors – innovation, life sciences, film studios, to name a few.  Again, helpful, but the sums and measures involved were not game-changing.

“Perhaps of greater immediate interest to the commercial real estate sector are the OBR’s revised forecasts.  These now point to significantly lower inflation and somewhat higher growth over the coming years, and although largely just playing catch-up with City views, this new outlook is more supportive of much-anticipated interest rate cuts.

“Big questions over the level of public sector funding remain.  What is clear, however, is that the private sector will be called upon to make up some of the shortfall in UK infrastructure investment – in the broadest sense.”

 

‘We can’t help but feel disappointed at a lack of considered focus on the property sector’ – 

Jon Byers, Founder of Anderson Rose

“Each time a new budget is revealed we can’t help but feel disappointed at a lack of considered focus on the property sector. It could be pie in the sky thinking but incentives to encourage buy to let investment need to be reintroduced. Landlords and tenants are suffering from a lose-lose situation where despite significant rent rises landlords are still making a loss and leaving the market, which is then reducing the amount of stock available to rent and putting upward pressure on rents. The net result for tenants is that they are paying higher rents for properties that they have to fight over when they become available and landlords are having to top up their income each month in order to break even.

“On top of this, Stamp Duty is in need of urgent reform as it is keeping people from moving more regularly which stifles supply and keeps house prices high. There was a time for the government to cash in when the market was at its height and booming but it’s now in urgent need of support or we could see irreversible damage that could hinder a generation.”

 

‘I would like to have seen some further announcements related to the housebuilding and construction    sectors’ – 

Rutu Buddhdev, Founder of Amara Property

“The Chancellor’s Spring Budget revealed a large amount of tax giveaways. I believe the 2% personal tax cut is a very good thing as fast-growing economies, such as the USA, tend to have low taxes and this allows them to recover from financial crises faster. I would like to have seen some further announcements related to the housebuilding and construction sectors. Those within the industry have been imploring the government to improve their focus on the industry to support the delivery of new homes that will not only provide places for people to live but also create numerous jobs and support the economy in the process.

“I would also like to have seen more support for first time buyers and older buyers, looking to downsize. Some reduction or incentive on stamp duty would be appreciated by the sector as a whole, as this would provide a boost to the market and incentivise buyers to move now. This lack of focus could prove costly for the Government, especially given the current state of the economy, which could risk the party’s chances in the upcoming election.”

 

‘We’re not at all surprised that there’s been no adjustment to the SDLT rates’ –

Paul Cosgrove, Director at Finlay Brewer

“It was clear that the Chancellor was determined to reduce National Insurance by a further 2p which equates to apx £450 per annum for the average worker.  We’re not at all surprised that there’s been no adjustment to the SDLT rates to increase property transactions and to encourage the full spectrum of buyers to consider their options whether that be to upsize or downsize. There are some clever ways in which both the Exchequer and buyers who need and want to move could have gained and this would inevitably increase transactions.

“We also feel that there had to be policies included to provide relief for Buy-to-Let landlords who have become an endangered species following years of increased taxes and red tape. The returns currently on offer for landlords make it more of a loss leader than profit generator that is seeing many sell up and move on, which in turn is putting upwards pressure on rents as there is less available stock and an ever-growing pool of tenants. Perhaps this was the ideal time to remove or reduce the additional 3% SDLT rate for buy-to-let purchasers to incentivise landlords and attract new ones. Ultimately, we won’t know but we can’t help but feel it was an opportunity missed.”

 

‘Very little for home-movers’ – 

Tim Bannister, Rightmove’s property expert

“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 are left with very little. There is a chance that the reduction in the higher rate of capital gains tax will mean some landlords to sell properties which could, in turn, increase choice for first-time buyers. Whilst any increase in supply for first-time buyers is welcome, we will have to wait to see how substantial it is, and it may also result in a further reduction in already-tight rental stock levels in the short term.”

 

‘A missed opportunity to support the rental sector’ – 

Christian Balshen, Rightmove’s lettings expert

“Anything that makes homes more affordable to local residents in staycation hotspots, through either the lettings or owner occupier market, is welcome. The removal of tax reliefs for landlords of holiday homes in conjunction with lowering capital gains tax when they sell, may see more of these properties come to the sales market. However, it has become clear in the last few years that penalising landlords does not work to promote a functioning Private Rented Sector. This is another example of a missed opportunity to support the rental sector for the benefit of both tenants and landlords.”

 

‘Not one mention of the word ‘mortgage’’ – 

Matt Smith, Rightmove’s mortgage expert

“Despite mortgages being one of the defining topics of 2023, there is not one mention of the word in the 98-page Spring Budget. Whilst a 99% mortgage scheme was reportedly considered, it appears to have been scrapped and then no replacement found. More innovation is needed to help first-time buyers with smaller deposits, and those who are struggling to borrow enough to get onto the ladder.”

Budget 2024: The prime property sector’s hopes & expectations

All we hope for is a reduction in SDLT,’ says one London estate agency chief – ‘however in reality I suspect there is more chance of stumbling across a unicorn in Regent’s Park!

By PrimeResi Journal

Jeremy Hunt is preparing the next big outing for HM Treasury’s red box, limbering-up to make a suite of tax and fiscal policy announcements next week. His speech on 6th March will very likely be the last big Budget address before the next General Election – which means the Chancellor is more likely to pedal vote-garnering tax-cutting policies than in a less politically-charged year.

We asked leaders in the prime resi sector to weigh-in on what new tax policies they expect to be announced next week, as well as what they would like to see happen… These are the key talking points:

Inflation & interest rates

It’s already a government priority, but most of our panel of property industry leaders believe that reducing inflation should remain top of the Treasury’s agenda. This would enable interest rates to stabilise further or even fall, which, as Will Scoular of Investec points out, would provide “a significant catalyst for a recovery of the residential market.”

Stamp Duty

Traditional and widespread calls for a cut to Stamp Duty are tempered with realistic expectations this year – as summarised by Camilla Dell of buying agency Black Brick: “I think we were all secretly hoping for some good news in this budget as a last-ditch attempt for the Tories to win back some support, but I just don’t see what they can give away tax wise.” Mark Parkinson of Middleton Advisors agrees, explaining that “the perennial cry for a reduction in stamp duty is just never going to be politically acceptable for prime properties.”

“All we hope for is a reduction in SDLT,” declares Marc Schneiderman of North London agency Arlington Residential. “However in reality I suspect there is more chance of stumbling across a unicorn in Regent’s Park!”

Nigel Bishop of buying agency Recoco thinks, however, that a targeted approach could work. He is pitching “a freeze of SDLT for downsizers” that would encourage over-65s to move on and “boost the number of family homes being put up for sale.” Easing the burden on downsizers has a lot of support on the Conservative backbenches, with over 100 “One Nation” MPs backing the cause.

Jess Bishop of super-prime brokerage DDRE Global has bigger ideas. She suggests more full-throated reform, away from an up-front transaction tax towards an annual levy. “It would be refreshing to see us look to other global locations that do it differently (and sometimes better!),” she says, adding: “A yearly paid tax, as is the case in the US, has a lot of merit.”

International buyers

The prospect of increased tax rates for non-British buyers of UK property has been floated by the Treasury, potentially raising the current 2% surcharge. This “could definitely impact the prime central property market,” warns Shaun Drummond of Harrods Estates, who suspects any further increase to the transaction tax could push “many more” would-be overseas buyers to rent instead.

“We must continue to encourage a global London to attract international buyers to invest and/or live here,” says Dominic Agace, boss of estate agency network Winkworth “– avoiding punitive moves that will affect the delicate balance of the market and all the suppliers and services which benefit from high net worth buyers.”

Beyond this, Agace says “the Chancellor needs to introduce tax incentives through inheritance tax or stamp duty concessions to encourage downsizers and stimulate a healthy flow through the property market.”

Inheritance & Capital Gains tax

Suggestions of a cut to Inheritance Tax have been circulating in advance of the Budget. This “could be a game changer,” says Jon Johnson, Managing Director of London estate agency Johns&Co, “providing new avenues for efficient wealth management and estate planning.”

But “calls for Inheritance Tax to be abolished are wishful thinking,” laments Antony Antoniou, CEO of Robert Irving Burns – although “simplification of the regime and unfreezing the nil rate band would certainly help to make residential buy-to-let a more attractive asset class.”

Buying agent Nigel Bishop agrees that IHT rates should be updated, arguing that raising the threshold for property values “seems long overdue.”

There is potential for the Chancellor to make changes to both IHT and Capital Gains Tax, notes Mark Harris of mortgage broker SPF Private Clients – but “we are not holding our breath.” He adds that “investors are unlikely to see much relief in the Budget.”

Similar thoughts come from Vic Chhabria of London Real Estate Office, who expects only “minor, if any” changes to IHT and Stamp Duty next week, as the government seeks to deliver “the broadest possible people pleaser ahead of the polls.”

VAT on building works

The current VAT regime provides an incentive for property developers to build new homes rather than refurbish existing buildings. “We would urge the Government to reconsider the current VAT thresholds,” says Will Scoular of Investec, noting that the existing policy “ignores the inherent carbon capture advantages of repurposing over building new.”

Buy-to-let

There’s a chronic shortage of rental properties, particularly in London. Richard Davies, Director of UK Operations at Chestertons, suggests this could be addressed by easing the tax burden on landlords. “We would like the government to consider reintroducing mortgage interest relief and other tax breaks for landlords,” he says, explaining: “This would encourage more buy-to-let investors and smaller landlords to acquire property to rent again which will help meet the ongoing demand from tenants and stabilise rental increases in the capital.”

Antony Antoniou, CEO of Robert Irving Burns, agrees that “the Government should be considering how to incentivise greater investment in buy-to-let.”

Prime property industry hopes & expectations for the Budget 2024

‘Reform the SDLT system to free the property market’Alex Michelin, Founder and CEO of property developer Valouran

“In the budget, we would like to see a reform to the SDLT system in the UK. It is now abundantly clear that the present system is not working. It is gumming up the housing market, preventing people from moving, stopping first time buyers getting on the housing ladder, affecting older generations because they cannot afford to move from their big old houses and is therefore reducing social mobility – the very bedrock of how society improves, and how the population moves forward. It is a massive problem and the government needs to act to free the market and allow transactions to proceed without so much friction and tax burden.”

 

‘I just don’t see what the Conservatives can give away tax wise’ – Camilla Dell, Managing Partner at buying agency Black Brick

“As far as other tax changes go, I don’t see the Conservatives being able to change much considering the recent data that the UK went into recession in the final quarter of last year. I think we were all secretly hoping for some good news in this budget as a last-ditch attempt for the Tories to win back some support, but I just don’t see what they can give away tax wise.

“The property market has taken a beating in terms of tax rises and red tape for Landlords since the Tories came into power. I would like to see a simpler tax system, and one which doesn’t prevent people moving up and down the housing ladder due to prohibitive levels of stamp duty. Current stamp duty levels are in my opinion too high and have created a huge drag on the volume of transactions taking place in the UK. In addition, the red tape on buy to let landlords have created unfavourable conditions for tenants (an unintended consequence I’m sure) with rents rocketing double digits over the last couple of years in London due to reduced supply as many private Landlords have left the market.”

 

‘The top end of the property market is already ‘well-taxed’’ – Mark Parkinson, MD of Middleton Advisors

“The perennial cry for a reduction in stamp duty is just never going to be politically acceptable for prime properties, it is also a signal that the top end of the property market is already ‘well-taxed’.

“In the current environment it is probably better to focus on what we don’t want to see, namely increased taxes on international buyers – we want to avoid more restrictions or penalties for non-doms as they continue to form an integral part of the landscape in the prime property market.”

 

‘Further tax increases for international buyers could definitely impact the PCL market’ – Shaun Drummond, Director of Residential Sales at Harrods Estates

“Given that a big section of our market is based on international buyers in Prime Central London, one of the big things we will be looking at is whether there are any changes for these pools of buyers when it comes to Stamp Duty. With there already being a 2% surcharge for international buyers, at the upper end of the market with most of them paying 17% stamp duty land tax – so any further increases could definitely impact the prime central property market.

“While PCL prices are still below the peak of 2014/ 2015 and property here still offering relative value compared to other major world cities, especially with the dollar/pound currency play, any additional increases could impact appetite for international buyers. Instead, many more may choose to rent at the upper-end of the market rather than pay yet more Stamp Duty.”

 

‘Reconsider VAT thresholds to encourage property refurbishment’ – Will Scoular, Head of Private Client RE at Investec

“First and foremost, the Government should prioritise setting out a prudent monetary policy to reduce inflation. This would in turn enable interest rates to be reduced – providing a significant catalyst for a recovery of the residential market. It would also help first-time buyers to get on the housing ladder.

“We would also urge the Government to reconsider the current VAT thresholds which encourage new-build residential development and discourage property companies who are considering refurbishing/repurposing existing buildings. The current policy ignores the inherent carbon capture advantages of repurposing over building new. Refurbishment can in some cases be more costly than redevelopment and, with reduced demand for shopping centres and office real estate, there is a clear opportunity to provide much-needed housing within existing developed sites.”

 

‘Reintroduce tax breaks for landlords’ – Richard Davies, Director of UK Operations at Chestertons

“Tax changes and legislations have forced a number of Buy to Let investors to sell up which has inevitably decreased the number of available rental properties and over time will create an even more competitive environment for tenants. To ease pressure on the current supply and demand deficiency, we would like the government to consider reintroducing mortgage interest relief and other tax breaks for landlords. This would encourage more Buy to Let investors and smaller landlords to acquire property to rent again which will help meet the ongoing demand from tenants and stabilise rental increases in the capital.”

 

‘Calls for Inheritance Tax to be abolished are wishful thinking’ – Antony Antoniou, CEO of Robert Irving Burns

“London’s prime property market is beginning to pick up, as greater demand from occupiers translates into higher sales volumes. However, with the economy still on unsure footing and political uncertainty in the run-up to the General Election, investors are having to be more savvy.

“Commercial property, falling outside of the scope of Inheritance Tax for overseas investors, has become a more popular asset class, particularly amongst Asian investors.

“Calls for Inheritance Tax to be abolished are wishful thinking but simplification of the regime and unfreezing the nil rate band would certainly help to make residential buy to let a more attractive asset class. With supply of good-quality rental stock low, the Government should be considering how to incentivise greater investment in buy-to-let.”

‘Freeze SDLT for downsizers – Nigel Bishop of buying agency Recoco Property Search

“For decades, our nation’s desire to own a property and the associated taxes have been a major revenue stream for the UK government. Today’s housing market, however, suffers from an evident imbalance between supply and demand which prevents many people from buying a home and we would like the Chancellor to introduce steps that will help get the housing market moving again.

“The UK has a vast number of property owners aged 65 and over who would like to downsize but, due to the current level of SDLT, are reluctant to do so. Property values have ballooned over the past decades which means the SDLT rate of 5% to 12% can present a substantial expense that stops many people from selling up and pursuing buying a different property. We believe that a freeze of SDLT for downsizers would encourage this market demographic to finally make that step which will inevitably boost the number of family homes being put up for sale.

“Although Jeremy Hunt initially announced that the Inheritance Tax threshold will be locked in until 2028, we would welcome the government to rethink this move. The IHT threshold hasn’t been updated in over two decades whilst property values have increased dramatically during this time. It is therefore outdated and raising the threshold from £325,000 to £500,000 per person or £1mn for couples seems long overdue.”

 

‘Look to the US for SDLT reform ideas’ – Jess Bishop, advisor at DDRE Global

“Reform of Stamp Duty Land Tax has significant potential to address several challenges in the market. Not least in unlocking larger family homes where empty nesters have little incentive to move with such a financial hit waiting for them. But I hope the Chancellor takes a broader view than this, as it’s not only this end of the market that the current ‘upfront charge’ model stifles.

“In terms of reform, it would be refreshing to see us look to other global locations that do it differently (and sometimes better!). A yearly paid tax, as is the case in the US, has a lot of merit. Paid out annually alongside other utilities, it removes the strong disincentive to moving – up or down – that the current system imposes while still maintaining an income for the government. Rather than vote-seeking tweaks ahead of the General Election, this is an opportunity for real, meaningful change that could unlock a lot of supply and stagnation in the market.”

 

‘All we hope for is a reduction in SDLT’ – Marc Schneiderman, Director at Arlington Residential

“All we hope for is a reduction in SDLT.  However, in reality, I suspect there is more chance of stumbling across a unicorn in Regent’s Park!

“If the Chancellor really wanted to invigorate the property market, that’s what he should be doing. Even a nominal reduction what have an impact.

“Consider the following:

“As recently as 20 years ago the highest rate of Stamp Duty was 2%.

“Now it is 12% plus an extra 2% if you are an overseas buyer and an additional 3% if you own a property anywhere else in the world.  In my view this is plainly unfair and unjust.

“The Government has benefitted from huge increases in revenue from SDLT as property values have soared in the last 20 years.

“So not only are they now taxing up to 8 times what they were 20 years ago, they are also levying this tax on values that have quadrupled; as an example, a house in 1998 that sold for £2m would have paid £40,000 in SDLT. That same house today which is selling for £8m is paying 15% (assuming the buyer owns a second property) at £1.2m.

“The  SDLT ‘holiday’ during the Covid 19 Pandemic generated noticeable increases in levels of activity and property sales.  This demonstrated that even in the worst period of time for business since 1939,  a SDLT reduction was able to contribute to a  higher volume of sales and as a consequence, helped to maintain the employment of surveyors, architects, designers as well as hundreds of thousands of people in the building trade.”

‘The Chancellor will do whatever he can to make the budget as enticing as possible’ – Nick Loweth, Regional Director at The Country House Department

“I suspect that the Chancellor will do whatever he can to make the budget as enticing as possible prior to the forthcoming general election. A strong property market has always given a boost to the economy, so it is very possible that he will make some changes to inject some pace into the market, which has somewhat stalled after the pandemic peak. One area that has had a strong effect in the past has been an adjustment to stamp duty, which is punitively high at the middle / top end of the market currently. This could be in the form of a simple percentage reduction or even a stamp duty holiday (although I think this is unlikely). There could also be more help to buy at the lower end of the market, again through a lowering of stamp duty or a change of thresholds.”

 

‘I would expect an uncontroversial budget given the looming election’ – Katrina Graham, Director at property developer Residence One

“The spring budget will be designed with the election in mind and the objective of appealing to the majority voter. Expected announced measures are likely to be more meaningful in terms of sentiment creation rather than beneficial policy/tax strategy. Current suggestions focus on potential tax reductions delivered through basic tax bands or personal allowances. However, I would imagine the Chancellor would err on the side of caution given inflation has not reduced to target levels. A small upward movement to inflation would have a meaningful effect on interest rates and a negative effect on the property market, a market that is expected to regain traction in 2024.

“As always, a Stamp Duty reduction or freeze would have the double benefit of appealing to mainstream voters whilst consequently creating positive sentiment which the property market would benefit from.

“The Government is receiving increasing pressure to fund local councils and government departments. Although I would imagine this is unlikely, consideration for planning resources and framework is one that property industries would welcome. Developer planning continues to be one of our greatest challenges. A less burdensome system would unlock so many potential developments.

“In summary, I would expect an uncontroversial budget given the looming election and pressure around inflation and interest rates. Our Chancellor has been reported discussing the benefits of tax cuts for business, following suit with countries which have benefited from demonstrable economic growth. However, given the conservative’s current political agenda, it’s unlikely this will be delivered.”

 

‘Investors are unlikely to see much relief in the Budget’ – Mark Harris, chief executive of mortgage broker SPF Private Clients

“Reports suggest that the Chancellor has first-time buyers in his sights with plans to introduce a 99% mortgage, backed by the government and aimed at those who can’t raise a deposit. While not directly targeted at high-net-worth individuals, anything that gets the market moving at the bottom end will have a positive impact further up the ladder and enable other transactions to happen. In other words, it is good for the housing market as a whole although critics will warn that unless supply is also addressed, such a scheme will only push up property prices. Another version of Help to Buy (as it was or improved) would also boost demand and help supply by getting the construction market going again.

“Many within the property industry are calling for stamp duty reform, perhaps incentives for downsizers and another holiday for first-time buyers. Some are going as far as calling for a total recalibration. Last time there was a stamp duty holiday it led to a significant increase in activity and transactions, which is better for the overall health of the market than rising property prices.

“Investors are unlikely to see much relief in the Budget. Landlords have become a dirty word yet few dispute the need for a fully-functioning private rented sector. Reviewing or reversing some of the heavy tax burden that has been imposed over the past decade would be a welcome first step towards addressing the balance a little.

“The government could pause, review or reverse changes to capital gains tax thresholds and/or review changes to inheritance tax, which would be welcome but we aren’t holding our breath.”

 

‘A revision to stamp duty thresholds is vital’ – Dominic Agace, Chief Executive of Winkworth

“We expect to see support for first time buyers with a help to buy update or mortgage guarantee scheme, allowing those that can afford mortgages but can’t raise the deposit to get on the ladder.  This will also support demands to ensure housebuilders deliver homes for first time buyers.

“The lifetime ISA and 25% bonus on £4k invested per year limited to £450k properties needs to be tweaked and simplified to allow for price growth.

“A cut to income tax appears heavily flagged which will support the UK recovery in 2024.

“The Chancellor needs to introduce tax incentives through inheritance tax or stamp duty concessions to encourage downsizers and stimulate a healthy flow through the property market.

“The return of mortgage interest relief will ensure there remains enough supply in the private rental sector for demand and a healthy mix in the housing market in our cities, to enable young professionals to start their careers, bringing vibrancy and international appeal to London and other major cities.

“A revision to stamp duty thresholds is vital to reflect the fact  that a £1mn property is very different in different parts of the country. Due to the cost of property in London,  young families  are being affected because they need space for growing families. The capital should not be a city just for the very wealthy.

“We must continue to encourage a global London to attract international buyers to invest and/or live here – avoiding punitive moves that will affect the delicate balance of the market and all the suppliers and services which benefit from high net worth buyers.

“Many house builders rely on international investors buying at an earlier stage to ensure the viability of a scheme. The investors also contribute to the homes available for private renters.”

 

‘Inheritance Tax reforms could be a game changer for HNWIs’ – Jon Johnson, Managing Director, Johns&Co

“The Spring Budget is a key moment for our clients navigating London’s property market. The rumoured reduction in the income tax rate to 18% would be more than just a policy change – it would be an opportunity for our clients to increase their investment power in the property sector. For our high-net-worth clients, the anticipated inheritance tax reforms could be a game changer, providing new avenues for efficient wealth management and estate planning.

“We’re particularly hopeful for any new or refreshed initiatives that could benefit first-time buyers, like enhancements to the Help-to-Buy scheme. These changes are not just policy shifts, they represent crucial support for our clients looking to enter London’s high-value property market. We’re also keen to see new incentives for sustainable development, aligning with our commitment to future-proof our clients’ investments and contributing to London’s growth.

“The Spring Budget isn’t just about tax reforms and housing policies, it’s about creating real benefits for our clients, helping them to navigate and succeed in London’s dynamic property market. At Johns&Co, our focus is always on how these changes will unlock new possibilities for our clients, enhancing their experience and opportunities in the property sector.”

 

‘I expect minor, if any, changes to SDLT and IHT’ – Vic Chhabria, founder and CEO, London Real Estate Office

“Stamp Duty and Inheritance Tax are unsurprisingly on the potential agenda for next week’s Budget, with a General Election round the next corner and the incumbent party seeking to maintain, if not, gain favour among their voter set.

“On that basis, any decision is going to be politically tactical and short term in view. Which is a risky business right now. We need a longer term and economically driven view that seeks to ensure London and the UK remains an attractive place in which to live, invest and spend in what is an increasingly competitive global market.

“We have long relied on the sentiment that ‘London is London’ and it is certainly a unique and enduringly appealing draw. Yet we cannot ignore the wider context of rising taxes, interest rates and levies alongside complicated bureaucratic systems on which other leading cities are closing the gap.

“As with most of my industry, I’d like to see meaningful reform in the likes of SDLT and IHT in particular: one that nurtures the prosperity of existing citizens without inadvertently indicating wealth is unwelcome. However, I’d expect next week’s changes to be minor, if any, in these areas in an attempt to be the broadest possible people pleaser ahead of the polls.”

 

 

 

 

 

London is going to retain its attractiveness to wealthy international buyers regardless of this outcome

London is going to retain its attractiveness to wealthy international buyers regardless of this outcome

Camilla Dell, Managing Partner at Black Brick

“Now that an ‘out’ vote has been cast, we will, no doubt, experience a period of ongoing uncertainty as the UK seeks to agree a way forward with the EU. Sterling may weaken even further, making London property even more attractive to foreign buyers.

“In general terms, London is going to retain its attractiveness to wealthy international buyers regardless of this outcome; its cultural attractions, geographic location, legal system, and concentration of talent mean that there will always be demand for Prime Central London property.”

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