With new Chancellor, Rishi Sunak, set to reveal his first Budget on 11 March, next Wednesday’s announcement is expected to involve plans that ‘shake up’ the mortgage market, according to AJ Bell.
The investment platform, outlining what people should be looking out for in relation to their personal finances, has indicated it is expecting the Conservatives to announce several changes to housing.
AJ Bell suggested the Government had initially looked like it might try to raise money by putting an extra tax on those who have built up property wealth – either through higher council tax or an additional levy.
“The plans went down like a lead balloon with Tory backbenchers, who knew many of their constituents would be affected, and it seems the Government is backing away from this particular idea,” AJ Bell personal finance analyst, Laura Suter, commented. “But we are expecting some changes to housing.
“Johnson’s pledges during his campaign to become Prime Minister that he would slash stamp duty seem to have been forgotten, but they could resurface.
“What is more likely is plans to shake up the mortgage market, revealed in the Tory manifesto, with a promise to offer more long-term mortgages in order to cut the amount of deposit (that) first-time buyers need. Details on how this would work were scant, but we look forward to finding out more.”
The investment platform also highlighted that business have been calling for changes to business rates for years, and that the Conservatives had proposed an overhaul in their 2017 manifesto. However, AJ Bell noted these were yet to materialise, and that businesses on the high street are ‘still shouting out for reform.’
Suter also highlighted that the latest Conservative manifesto had pledged a cut to retail businesses, as well as a wider review of the system.
“One suggestion floated in the build-up to the Budget is to replace business rates with a Land Value Tax, effectively shifting the tax burden to landlords,” she continued.
“Rates would depend on what the land is used for, for example with a lower rate for farmland. The suggestion is that this could level the playing field between online and high street businesses, as warehouses would be taxed alongside high street stores.
“The worry is that any announcement would be the launch of a review looking at ways to change the system, with businesses having to wait years for any actual change to happen. We’d also need to see exactly how the rates were calculated before we could tell whether it would actually save shops money.”
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