Within the Spring Budget, Chancellor Jeremy Hunt revealed a positive shift in the UK’s economy and some announcements that could impact property investors.

Boosting economic growth was the overarching theme of the Spring Budget on Wednesday 15 March. In terms of actual housing policy, there was a stark absence once again. Most of the measures didn’t come as a shock, but some professionals in the property industry feel this was a missed opportunity for the UK housing market.

‍

Energy price guarantee extended

To help with the cost of energy, Hunt announced that the energy price guarantee will remain at £2,500 for the next three months from April to June. This is ahead of an expected fall in energy prices in July and is projected to save the average household around £160.

High energy prices have been a worry for many. Because of that, this support could lead to fewer rent arrears across the private rented sector and provide more confidence to tenants, homeowners and property investors alike.

But even so, there were still announcements that will indirectly impact the sector and economy. It’s important to consider how the changes within the economy and new policies will impact property investors. This can help you understand how your property investments could be impacted.

‍

Upcoming corporation tax change

Property investors purchasing properties through limited company structures can benefit from a number of tax advantages. For an increasing number of landlords, this has become the preferred option to invest in property and means the company is liable to corporation tax.

In the Budget, Hunt confirmed the rate increase for corporation tax. From April, companies earning over £250,000 in profits will owe 25% corporation tax, instead of the previous rate of 19%. This will predominantly impact property investors with larger portfolios, but it’s something investors with limited companies need to be aware of.

This should also be a consideration for those looking to set up a limited company to purchase property through. It’s recommended to speak to a specialist to help you figure out what’s the best way for you to invest, and this is something The Prestbury Advisory are able to facilitate.

‍

New investment zones in the North and Midlands

During the Budget Speech, Hunt praised Canary Wharf and Liverpool Docks as “two outstanding regeneration projects that transformed the lives of thousands of people”. As part of the government’s levelling up agenda, he announced 12 new investment zones across the UK.

This includes Greater Manchester, Liverpool City, West Yorkshire, South Yorkshire, Tees Valley, the West Midlands and North East England. Local authorities from these areas are being invited to apply for £80m of support for the development of each investment zone.

The creation of new investment zones comes with a number of benefits for the local people, economies and housing markets. Investment in these regions would likely bring more jobs, people and new housing, and in turn, this will further boost key locations that are already prospering.

In the coming years, successful investment initiatives such as this will create more attractive investment opportunities, meaning even more investors will turn their focus to the North and Midlands. Significant investment and development like this often assist house prices to go up over the long term and could lead to strong rental demand for the years to come.

At The Prestbury Advisory, our team can provide you with up-to-date knowledge and advice on the UK housing market, including areas of the North and Midlands. If you want to speak to our team about your next property investment opportunity, give us a call on 01625 725 779, or email us at contact@theprestburyadvisory.com.