On 6 March 2024, Chancellor Jeremy Hunt delivered the UK Spring Budget, announcing a series of changes covering personal tax, property and household finances. While there were no dramatic changes to the mortgage market itself, several measures could affect homeowners, landlords and property investors.
National Insurance Cut
One of the headline announcements was a further reduction in National Insurance.
From 6 April 2024, the main rate of employee National Insurance was reduced from 10% to 8%, while the main rate of Class 4 National Insurance for the self employed was reduced from 8% to 6%.
For some households, the reduction could increase monthly take home pay and potentially improve disposable income when considering future financial commitments.
Changes for Property Owners and Investors
The Budget also introduced several important property related tax changes.
The higher rate of Capital Gains Tax on residential property was reduced from 28% to 24% from 6 April 2024. The lower rate remained at 18%.
The government also announced the abolition of Multiple Dwellings Relief, which previously allowed Stamp Duty Land Tax relief when purchasing more than one dwelling in a single transaction. The relief was removed from 1 June 2024, subject to transitional arrangements.
Another significant announcement concerned Furnished Holiday Lettings. The government confirmed that the separate Furnished Holiday Lettings tax regime would be abolished from April 2025, bringing the tax treatment of these properties closer to that of other rental properties.
For landlords and property investors, these changes made it particularly important to consider the tax implications of future purchases and how properties are held.
Changes to Child Benefit
The Spring Budget also increased the threshold for the High Income Child Benefit Charge.
From April 2024, the threshold increased from £50,000 to £60,000, while Child Benefit would not be fully withdrawn until individual income reached £80,000.
This meant more families could retain some or all of their Child Benefit compared with the previous rules.
What Does the Budget Mean for Mortgage Borrowers?
The Spring Budget did not directly determine mortgage interest rates. Mortgage pricing continues to depend on factors including the Bank of England base rate, financial markets, lender competition and individual circumstances.
However, changes to taxation and household income can affect affordability and longer term financial planning. Buyers, homeowners and landlords considering their next property decision should therefore look at the Budget alongside their wider financial position.
Whether the Spring Budget delivered fireworks or simply pulled a few rabbits from the hat depends largely on individual circumstances. For property buyers and investors, the most relevant changes were arguably those affecting Capital Gains Tax, property investment and disposable household income.
Tax treatment depends on individual circumstances and may be subject to change. Tax advice is not regulated by the Financial Conduct Authority.
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