There’s a saying in the UK that ‘no news is good news’; to some extent, this is what investors may take from Chancellor Jeremy Hunt’s spring budget. After autumn’s disastrous ‘mini-budget,’ this one was less eventful and presented a positive economic outlook for the UK. In this blog post, we’ll outline what you need to know as an overseas UK property investor - and how the budget may benefit UK landlords.

Firstly, let’s talk about inflation, which has rather taken over property’s moniker of location, location, location. The news that the government expects inflation to be down to 2.9% by the end of the year is very welcome indeed, with interest rates dipping lower far sooner than many economic commentators anticipated. This, coupled with the announcement that no recession is expected, is excellent news for house prices; we expect a stable market in 2023.

Changes to corporation tax may affect landlords with large portfolios in company names, the rate increasing from 19 to 25 percent on £250,000 and above. Primarily, this shouldn’t affect individual buy-to-let investors and non-portfolio landlords.

The property sector responded with some criticism that no changes were made to Stamp Duty, anticipating that tax breaks might be available to first-time buyers. Similarly, no changes to Capital Gains tax were announced, although the taxable threshold will be lowered from £12,300 to £6,000 in April 2023. The government also faced criticism for failing to provide any tax breaks or assistance for UK landlords looking to increase the energy efficiency of their properties.

No announcement was made on any policy designed to ease the shortage of new homes or any strategy to combat the private rented sector supply crisis. But, the devolution of further powers to local authorities to ‘set the strategic direction of the Affordable Housing Programme’ may combat squeezes in local supply by freeing up planning restrictions and available land for development. Watch the SFR sector swoop in here. The creation of Investment Zones may further knock on this by driving growth and “unlocking housing across the UK by lowering taxes and liberalizing planning frameworks to encourage rapid development and business investment.” At least, that’s the theory; as ever, it remains to be seen. 

 Landlords with tenants feeling the cost-of-living crisis will be pleased to learn that the Energy Cap on bills has been extended until June, when wholesale prices are expected to come down. This is definitely good news, for we all know that happy tenants happy landlords.

Our main takeaways from the budget are the positive economic outlook for the UK and the good news about falling inflation. This will stimulate the housing market and get buyers back out, looking to purchase with more affordable mortgages available and rising confidence in the resilience of the UK economy.

Visit our developments page to see the best UK buy to let property for overseas investors right now. With investment zones announced for the West and East Midlands and Greater Manchester too, check out our Birmingham and Manchester developments available to buy, as growth in these areas will only boost house prices further.

As ever, we’re here if you have any questions. Don’t hesitate to get in touch!

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