BPF Spotlight Series: Autumn Budget 2024

💡 In advance of the new Government’s first Budget on 30 October, we caught up with our Assistant Director of Policy (Finance) Rachel Kelly to hear what the Budget might mean for the property industry.  

❓ What are the BPF’s recommendations to Government in advance of the Budget?  

🗣️ In our Budget representation, we emphasised how important the partnership between Government and the property sector will be to deliver on some of the Government’s main objectives like building new homes and infrastructure, regenerating high streets and delivering net zero. We’ve focussed on a handful of important tax and spending changes that will help drive economic growth. These include reforming business rates, supporting energy efficiency retrofit works and tax changes to channel institutional investment into new homes.

❓ If you could prioritise one tax ask for this Budget, what would it be? And how likely are we to get it? 

🗣️ The Government seems quite serious about its pledge to build 1.5 million homes by the end of the Parliament (although they probably know it’s hugely ambitious), so I would hope for positive movement on housing. With the right tax and regulatory environment, we estimate that the Build-to-Rent (BtR) sector’s contribution to housing supply could double from 15,000 to 30,000 new homes a year.  

It’s really important that the Government reinstates SDLT Multiple Dwellings Relief (MDR) for BtR. Its abolition by the previous government has had a chilling effect on the market over the summer and has stifled previously viable BtR developments.   

The Government also has an opportunity to stimulate more private sector investment into social and affordable housing by committing to long term rent settlements – ideally of 10-15 years to attract capital from institutional investors.  

❓ Is there anything else you’ll be looking out for at the Budget?   

🗣️ Chancellors generally don’t like raising taxes, but we know that on this occasion the overall burden of tax on the economy will go up. With increases to the ‘big three’ taxes ruled out in Labour’s manifesto, the risk is that they will look to taxes like SDLT to pick up the slack, regardless of how bad this tax is reckoned to be by anyone outside of Government. 

Less likely, but equally dramatic, would be if the Government took steps to turn business rates into some form of Land Value Tax (LVT). While LVT has its proponents, the transition from status quo would be extremely complicated and would impact on values across the country, with knock-on consequences for commercial property lending

➕ About Rachel: Rachel is a chartered accountant by background and worked at PwC in the funds tax team before joining the BPF. Rachel broadly looks after most areas of tax and finance policy at the BPF.

Read our full Autumn Budget representation here.

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