Reaction to the Budget 2016 – what does it mean for housing?

The Chancellor’s summer Budget and Autumn Statement last year gave those in the property industry plenty to ponder and get enraged about, but his latest Budget last week – the eighth since Osborne moved into No 11 in 2010 – was a lot less focused on property.

Of course, the Budget has since erupted for very different reasons, but housing very much took a backseat this time round (other than the confirmation that the stamp duty changes for buy-to-let and second home owners will come into play after the April 1 deadline).

The 2016 Budget was unlikely to be too contentious or radical regarding property, with the Chancellor’s eyes firmly on the upcoming EU referendum in June.

There was, in fact, little mention of housing in the Budget as a whole, other than the introduction of local housing schemes in the South West, the announcement of the Lifetime ISA and a cut to Capital Gains Tax.

Perhaps Osborne thought he had done enough recently by attaching additional tax to buy-to-let and second homes – creating the current storm of activity in the property market from those attempting to beat the tax axe and complete purchases before April 1.

Nonetheless, other areas of the Budget do act as a reminder of the impact that the economy and infrastructure can have on the housing market.

For example, the creation of better road and rail links – allowing people to move between cities and towns across the UK in a fast and efficient manner – boosts demand for local housing.

Previously inaccessible locations can suddenly become accessible. Rundown areas can be regenerated by better transport links and the extra investment and jobs this brings. Having said that, major rail schemes such as HS2 and HS3 in the Midlands and the North and Crossrail 2 in London, as well as road route improvements such as the Pennine Tunnel, are very long-term initiatives. The beneficial effects of these on house prices will take a great deal of time to make themselves felt.

However, housing at local levels doesn’t need to be influenced by major, long-term projects like the above. Instead, homeowners and buyers should always keep a close eye on smaller local schemes and improvements.

As we know, changes for the better in transport, jobs, education, business and health have an immediate and positive influence on the demand for local housing, both in the rental and sales sectors. Evidence of this can be seen in the positive influence a good state school has on housing within its catchment area.

As a well-established estate agency business with its roots in the local community and with long-held local knowledge and deep understanding of regional affairs, at Tim Russ & Company we can always point buyers in the direction of those areas set to profit from modernisation and improvement.

This knowledge makes property investment in these areas potentially more beneficial as an appreciating asset than other long-established, popular and sought-after locations.

So, in conclusion, the Chancellor may not have done much directly to or for housing in this Budget. But other measures he has made will have a significant effect over time.

Tim Russ & Company have been providing estate and letting agency services in Buckinghamshire, the Chilterns and Oxfordshire for more than 20 years.

For more info about what we do and how we can help you, please contact us at one of our many branches. To find out how much your property could be worth, check out our free instant sales valuation tool.

Author – Justin Richardson