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autumn budget: impact on housing & business owners

Rishi Sunak’s highly anticipated budget was unveiled on 27th October amid uncertainty around Covid, rising living costs, and the climate crisis. The focus was firmly on the future, with Sunak declaring it paved the way for an “economy of higher wages, higher skills, and rising productivity.” The lack of available housing was acknowledged while sectors hit hard by the pandemic will enjoy year-long tax cuts in 2022-23.

We break down what it all means for the housing market and business owners.

£24 billion housing package

Sunak announced a total of £24 billion will be made available to the housing sector, with £11.5 billion earmarked to build 180,000 new affordable houses over the next few years.

The chancellor also confirmed £1.8bn would bring 1,500 hectares of brownfield land into use for housing development. Under the plans, 160,000 new greener homes will be built, with combined authorities and councils receiving £300 million to develop smaller brownfield sites for housing and improve communities.

Although many expected the property market to have more of a mention in the budget, the commitment to unlocking underutilised sites should help to create new opportunities for property investors and developers. If channelled effectively, new home-building programs could help alleviate the pressure on the shortage of affordable homes, helping millions of people across the country.

stamp duty cut

Rumours had been circulating ahead of the Budget speech that Sunak would further extend the cut. Yet, the high-profile issues of Stamp Duty and Inheritance Tax were not mentioned in the Budget at all.

More supply is desperately needed to keep property prices in check so that they don’t become beyond the means of the average buyer. At MT Finance, we have been campaigning for a while that one way of doing this is to cut or remove stamp duty for downsizers, encouraging them to move out of family homes into smaller properties, and freeing those homes up for those moving up the ladder. The stamp duty holiday has been such a success in boosting the housing market and wider economy, that it is worth looking at introducing some form of it in a targeted way. This will ensure that those who want to move to smaller properties aren’t penalised with a heavy tax on moving, which puts them off doing so altogether.

temporary cuts to business rates

Some of the sectors hardest hit by the pandemic – retail, hospitality, and leisure – have been granted a reprieve in the form of a temporary 50% business rates discount. This will be available for one year from 2022-23 and up to a maximum of £110,000.

Fairer and lower business rates for these sectors are sure to be welcomed. They should not only increase the productivity of town centres but encourage shops to retain a presence, resulting in sustained – and potentially more – employment. There is also the community aspect: a bustling high street will help to persuade people to shop locally and mean fewer empty units.

A shakeup of the system was also promised from 2023 with re-evaluations reducing from five years to three. A planned increase of the multiplier which was due to start next year has once again been cancelled. Sunak claims this equates to “a tax cut for business worth over £4.6bn over the next five years.”

relief for adopting green technologies

Further improvements to business rates were announced in the shape of relief for companies who adopt green technologies, such as solar panels. Starting in 2023, companies can make property improvements without paying any extra business rates for 12 months. Worth £750 million, this will not only help to reduce tax bills – which are set to rise due to inflation – but it should also drive down energy costs. With renewable energies becoming significantly cheaper, this is a great opportunity if you’re looking to reduce both your carbon footprint and your fuel outgoings.

Earlier this year we announced a new energy saving scheme which will see us give £250 credit to all borrowers who achieve an energy performance rating of A or B at any time during their bridging loan. Part of our commitment to driving positive change, this is available across our entire product range and can be accessed by both existing and new borrowers. This is suitable for both residential and commercial properties.

If you would like to find out more about our EPC scheme or you’d like to apply, email EPC@mt-finance.com.

our verdict

The measures announced for the retail, hospitality and leisure sectors will make a positive start to the next financial year. As well as ensuring that town and city centres remain busy and attract shoppers and customers, they also signify an opportunity for both prospective and existing investors and landlords.

With first and second charge bridging loans available for commercial and semi-commercial properties and rates starting from 0.80%, MT Finance is here to support those looking to invest in commercial property. We accept many income sources whether you are self-employed, in a partnership, or own a limited company, and our loans can be secured on many commercial property types, including offices, retail units, pubs, hotels and B&B), semi-commercial property, multi units, HMOs and student accommodation.

For more information regarding our commercial bridging loans, simply email us, call 02030512331, or fill out our contact form.

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