What Does the 2021 Budget Mean For Property Investors in Leeds?

Looking to invest in Leeds property? Here’s what the new Budget means for you.

Rishi Sunak’s second budget is a career-defining one. His first, in 2020, was an emergency measure designed to stem the worst of the pandemic’s impact; his second charts the road to recovery. The measures he’s taken to repair the UK economy will shape the country’s recovery, so how does this affect property investors?

Buying and selling property

The UK real estate market is crucial to the financial health of many Britons, and has received targeted support from the Chancellor. To help maintain liquidity in the market, two policies are to be implemented:

The Stamp Duty holiday is extended in full until July, with discounted rates lasting until September
Properties bought for less than £500,000 will attract no Stamp Duty tax at all. This threshold drops to £250,000 in July, and will be discontinued at the end of September. Those purchasing a second home (the majority of Buy to Let investors) will still pay a 3% surcharge on all properties, rising to 8% for properties worth more than £500,000.

Government backing for 5% deposit mortgages.
The Government is aiming to assist first-time buyers by backing mortgages with a small deposit. Increasing the number of buyers without significantly increasing available housing stock may have the effect of driving up demand as well. Shelter, a charity, claims that a similar initiative under Help to Buy was responsible for a 1.4% rise in house prices nationally, with a high proportion of this increase focused around relatively affordable areas such as Yorkshire and the Humber.

These measures are likely to support the housing market in the near future. We’ve seen high turnover in the property market as pent-up demand is released, and we expect these financial incentives to fuel further growth.

Investment in Leeds

An exciting development in the Budget was the creation of a £12 billion UK Infrastructure Bank (UKIB). This is intended to replace the role of the European Investment Bank, which will no longer be investing in the UK. Although the specific role of the UKIB is not yet clear, the Treasury has said that it will invest in technologies that are too risky for the private sector to help the UK meet net-zero carbon emissions by 2050. Examples given include electric vehicle charging points and carbon-capture technology.

This is great news for Leeds. Significant Government investment will directly create jobs in the city, as well as driving demand for services in the city. For Buy to Let investors, the influx of workers into the area will create a stronger rental market. The UKIB is officially slated to start work in April, though it will take several months to begin functioning fully. This is a good sign for long-term investment in Leeds; the city’s future is bright.

The wider financial picture

Government borrowing has hit new highs in order to deal with the challenges of the Covid-19 pandemic, reaching 100% of GDP for the first time in recent history. This is affordable because interest rates are at rock-bottom levels, making it cheap to service national debt. While interest rates remain low, it’s easy for the Government to maintain higher levels of spending. Although Mr. Sunak has avoided directly raising taxes on individuals, he has frozen the tax-free personal allowance at £12,570 until 2026, which will squeeze personal finances in the years to come.

Low interest rates and meagre tax relief make investing in real estate a smart prospect. Money in the bank earns next to nothing, while rental income provides a stable and rewarding return on investment. We remain confident that real estate will continue to be by far the best option for long-term investment.

What’s your next step?

There are opportunities for investors to find excellent properties, and the timing couldn’t be better. If you’re thinking of investing in the Leeds property market, Lifestyle Property People is the perfect partner to make your dreams a reality. Our 2021 consultation calendar is now open for pre-bookings; contact us today to schedule your appointment.

Looking to invest in Leeds property? Here’s what the new Budget means for you

Rishi Sunak’s second budget is a career-defining one. His first, in 2020, was an emergency measure designed to stem the worst of the pandemic’s impact; his second charts the road to recovery. The measures he’s taken to repair the UK economy will shape the country’s recovery, so how does this affect property investors?

Buying and selling property

The UK real estate market is crucial to the financial health of many Britons, and has received targeted support from the Chancellor. To help maintain liquidity in the market, two policies are to be implemented:

The Stamp Duty holiday is extended in full until July, with discounted rates lasting until September
Properties bought for less than £500,000 will attract no Stamp Duty tax at all. This threshold drops to £250,000 in July, and will be discontinued at the end of September. Those purchasing a second home (the majority of Buy to Let investors) will still pay a 3% surcharge on all properties, rising to 8% for properties worth more than £500,000.

Government backing for 5% deposit mortgages.
The Government is aiming to assist first-time buyers by backing mortgages with a small deposit. Increasing the number of buyers without significantly increasing available housing stock may have the effect of driving up demand as well. Shelter, a charity, claims that a similar initiative under Help to Buy was responsible for a 1.4% rise in house prices nationally, with a high proportion of this increase focused around relatively affordable areas such as Yorkshire and the Humber.

These measures are likely to support the housing market in the near future. We’ve seen high turnover in the property market as pent-up demand is released, and we expect these financial incentives to fuel further growth.

Investment in Leeds

An exciting development in the Budget was the creation of a £12 billion UK Infrastructure Bank (UKIB). This is intended to replace the role of the European Investment Bank, which will no longer be investing in the UK. Although the specific role of the UKIB is not yet clear, the Treasury has said that it will invest in technologies that are too risky for the private sector to help the UK meet net-zero carbon emissions by 2050. Examples given include electric vehicle charging points and carbon-capture technology.

This is great news for Leeds. Significant Government investment will directly create jobs in the city, as well as driving demand for services in the city. For Buy to Let investors, the influx of workers into the area will create a stronger rental market. The UKIB is officially slated to start work in April, though it will take several months to begin functioning fully. This is a good sign for long-term investment in Leeds; the city’s future is bright.

The wider financial picture

Government borrowing has hit new highs in order to deal with the challenges of the Covid-19 pandemic, reaching 100% of GDP for the first time in recent history. This is affordable because interest rates are at rock-bottom levels, making it cheap to service national debt. While interest rates remain low, it’s easy for the Government to maintain higher levels of spending. Although Mr. Sunak has avoided directly raising taxes on individuals, he has frozen the tax-free personal allowance at £12,570 until 2026, which will squeeze personal finances in the years to come.

Low interest rates and meagre tax relief make investing in real estate a smart prospect. Money in the bank earns next to nothing, while rental income provides a stable and rewarding return on investment. We remain confident that real estate will continue to be by far the best option for long-term investment.

What’s your next step?

There are opportunities for investors to find excellent properties, and the timing couldn’t be better. If you’re thinking of investing in the Leeds property market, Lifestyle Property People is the perfect partner to make your dreams a reality. Our 2021 consultation calendar is now open for pre-bookings; contact us today to schedule your appointment.