1. The government are desperate to encourage house buying
One of the key areas of this year’s budget was housing. It didn’t come as a big surprise that a government with a very bad public image with young people may want to grab some headlines to impress them with.
Hammond promised £44bn to help encourage house building. The amount includes investment, loans and guarantees to try and get the house building sector really moving. The chancellor is aiming to get 300,000 new houses built per year by the middle of the 2020’s.
Perhaps most eye-catching, however, was the chancellor’s promise to abolish stamp duty for First Time Buyers (FTBs). This applied to FTBs who are purchasing a house up to £300,000 and will also apply to equivalent buyers in London up to £500,000.
The issue being that it will save the average buyer about £500, whilst a vast majority believe that the move will simply push house prices up, costing FTB’s more in the long run as their deposit requirements shoot up in tandem with the tax changes.
Further to this, though, Hammond announced that local authorities will be able to double council tax on empty properties that are disused, hopefully forcing landlords to make use of vacant properties.
For commercial property, the chancellor announced that foreign investors will be forced pay capital gains tax in the UK.
2. The government needs to boost business
Hammond announced that he will be doubling the amount of money spent on the Enterprise Investment Scheme, which allows tax breaks and incentives for investors pumping money into businesses looking to grow.
The Chancellor also looked to butter up small business by linking business rate increases to the consumer price index rather than the retail price index, which is typically higher.
3. The regions are key to success
In a move that received significantly less attention that the housing announcements, Hammond also announced that he will be investing more than £2bn in transport schemes in the Northern Powerhouse region, which includes Manchester, Leeds and Sheffield.
With the city’s economies booming, it makes sense for the chancellor to capitalise on this and encourage more growth in the region, which intends to compete with London for GDP and GVA within 20 years.
Announcing more spending power for the devolved governments and metro mayors across the country, the chancellor gave a heavy hint that he sees the long term economic future of the country in a balanced and competitive UK, whereby regional cities and countries within the UK are subsidised in order to boost productivity.
We already see now the popularity of graduates and young workers moving to or settling within these regions, with property prices increasing. Now is the time to boost this growth even further.