Philip Hammond’s 2018 Budget saw a number of measures introduced which could have an effect on homeowners, homebuyers and businesses in East Anglia and nationwide. One of the most significant announcements was the abolition of stamp duty for first-time buyers purchasing shared ownership properties valued at up to £500,000 in England and Northern Ireland. The stamp duty change took immediate effect, but has also been backdated to 22 November 2017, which will allow qualifying buyers who purchased a shared ownership property after that date to claim a refund on any stamp duty paid.
The Chancellor pledged a further £500 million for the Housing Infrastructure Fund to potentially unlock 650,000 new homes. Other proposals relating to housing provision included funding to “empower up to 500 neighbourhoods to allocate or permission land for housing through the neighbourhood planning system for sale at a discount to local people, in perpetuity”.
A new version of the Help to Buy equity loan scheme is also being introduced, to run for two years from April 2021 to March 2023. The scheme will be available to first-time buyers purchasing homes with a market value up to a regional property price cap “set at 1.5 times the current forecast regional average first-time buyer price, up to a maximum of £600,000 in London”.
There was potentially less positive news for some East Anglia landlords in the Budget with changes to lettings relief, which can reduce capital gains tax liabilities on the sale of properties which were previously the owner’s residence but have since been let out to a tenant. From April 2020, lettings relief will only apply where the owner of the property is in shared occupancy with the tenant.
The Budget contained a potential boost for East Anglian businesses, particularly those in Suffolk towns such as Southwold, where rising business rates have recently been a serious concern for local small businesses, after average hikes of 177% last year. In a move intended to revitalise the nation’s high streets, business rates for firms with a rateable value of up to £51,000 will be cut by a third over two years. The loss in income is set to be balanced by a new digital services tax of 2% on the UK revenues of multinational tech companies with global sales of more than £500 million.
In a related measure, the Chancellor pledged £650 million for a ‘Future High Streets Fund’ designed to simplify the process of transforming commercial property into new homes, as well as to increase footfall and revive flagging locations.
Response to the Budget announcements from East Anglian business groups has been mixed. John Dugmore, chief executive of Suffolk Chamber of Commerce, said: “We’re delighted that the Chancellor has heeded our calls and that of the British Chambers of Commerce to abandon the uprating of business rates for the high street for the next two years, and gone further by cutting bills for the vast majority of high street firms … This short-term reduction in rates will be very welcome news to those on the high street who require urgent respite.”
However, Nova Fairbank, Head of Policy, Governance & Public Affairs for Norfolk Chamber of Commerce commented: “Whilst the Chancellor announced that the era of austerity was coming to an end, overall schemes and incentives specific to our region, in comparison to other UK areas, were in short supply. There is still no indication of when the broken business rates system will be overhauled.”