12th March 2021
What does the budget mean for the property market?
The Chancellor recently laid out his and the government’s economic plans for the year ahead in his latest budget address. There were many measures announced, including the extension of the furlough scheme and additional business support measures. Plus, there were many developments set out regarding the property industry that we were paying close attention to as the afternoon unfolded. Now that the dust has settled, our Commercial Director, Louise Moss, has taken a closer look at what the revelations mean for the property industry.
Business rates relief
One of the first issues covered was the extension of business rates relief, which will now be extended into June, and then at a reduction of 75% for the rest of the financial year. This will be of welcome relief to many commercial property owners who could have been facing hefty bills if this hadn’t been covered. The relief has been a much-needed safety net, especially for those property owners who have been struggling to let multiple vacant units for months due to an unsurprising lack in demand.
Despite this, there is no shortage of demand for commercial properties from investors. Even though tenants may be thin on the ground at the moment, investors will always be keen to get their hands on big empty properties that have the potential to be converted for alternative uses. We’ve noticed more commercial property owners turning to auctions over recent months, and for those who want to take advantage of the rates relief extension, auctions remain to be one of the only viable options to make a return on unwanted assets before the business rates are reintroduced. We predict a flurry of activity from commercial property owners now that the rate holiday has been extended, which may well continue depending on the state of the market as the country continues to recover.
Perhaps the decision that had most of the industry on tenterhooks, was that of the stamp duty holiday, which has indeed been extended. For sales up to £500,000 the holiday extends to the end of June while for sales up to £250,000, buyers and sellers have until the end of September to complete before the tax is reintroduced.
If buyers or sellers want to take advantage, they’ll still have to move fast, as conveyancers and estate agents once again fight to get sales over the line in time. Realistically speaking, anyone who agreed a sale or purchase on the open market today would still be unlikely to complete in time to meet the new deadline – unless they considered auction.
When you buy a property by auction, when the hammer falls, contracts are exchanged and the completion date is legally set – typically 20 working days later, or 40 days for a conditional (modern method) sale. This well-publicised speed and security of sale, coupled with transparency, ensures that competitive bidding leads to the best price being achieved in the market at that time.
It is likely that we’ll see continued appetite from auction buyers and sellers, driven by the certainty of auctions as we navigate this uncertain world. In fact, we’re already seeing more estate agents partnering with us to sell their properties and reduce the risk of withdrawals and fall-throughs.
Overall, the outlook for the property industry looks healthier than it did at this point last year. With the continuing roll-out of the vaccine and the roadmap to unlock the country, we can be hopeful of a productive next 12 months.
If you’d like to find out more about how the budget changes could affect your property sale or purchase, call our friendly team on 0800 046 5454 and we’ll be happy to help.