22 Mar

Budget 2013

Budget 2013

Commenting on the Budget, and the announcements therein, NAEA Managing Director Mark Hayward said:

"Any news about attempts being made to improve the property market can only be a good thing"  

There were some key announcements relating to housing and I have summarised these below:

  • The introduction of a new housing scheme, Help to Buy, with two key elements, which will provide £3.5 billion of capital spending.
  •  The first part is an equity loan of 20% of a home's value will be offered to people looking to move up the housing ladder. This will only available to buyers of a newly built home and the home cannot be worth less than £600,000 pounds.
  • £130 billion of guarantees for lenders who offer mortgages to people with a deposit of between 5% and 20% on homes with a value of up to £600,000, from the start of 2014.
  • Doubling the existing Affordable Homes Guarantee programme, to support £15,000 more affordable homes by 2015.
  • Extending the Build to Rent fund to £1 billion to support the development of new homes.
  • Extend Right to Buy.
  • Publish "significantly reduced" planning guidance by Summer 2013, in line with Lord Taylor's recommendations.

Budget Measures

Osborne said this is a Budget for 'people who work hard and aspire to get on'. There are 'no easy answers'. The Government is 'fixing the country's economic problems'.  He said this was to be a Budget for people who aspire for an 'aspiration nation'. 

Economy

  • The Chancellor conceded that growth will be lower and debts will be higher
  •  Growth is forecasted is revised down to 0.6% in 2013, 1.8% in 2014 and 2.3% in 2015, 2.7% in 2016. So the growth forecast is halved for next year.
  • The deficit will be 7.4% in 2013 an increase on the forecasted 6.9%
  • Borrowing - this year the Government will borrow £114bn this year
  • The Government will not be able to meet its public sector net debt target conceding a delay to 2017-18 so the debt target will be missed by two years 

Monetary Policy

  • The Asset purchase facility will remain in place for the coming year
  • The Chancellor is considering extending the Funding for Lending Scheme
  • The Chancellor set out an updated remit for the Monetary Policy Committee. This reaffirms the inflation target of 2%. The new remit also includes enabling the MPC to set out the trade-offs that have been made to secure the inflation target and a change in the correspondence system between the MPC and Treasury on inflation. The Chancellor has also asked the MPC to review how 'intermediate thresholds might work in Britain'

Spending

  • £11.5bn of savings to be made in the Spending Review
  • Additional 2% cuts to most Whitehall departments over the next two years amounting to £2.5bn. The savings will go towards large-scale infrastructure projects
  • Public Sector pay increases are limited to 1% in 2015/16.
  • A new limit on Annual Managed Expenditure further details to be set out in the Spending Review in June.

Growth Measures

  • Boost to infrastructure spending by £3bn a year from 2015 / 16 to be funded by savings in the Spending Review
  • Responding to the Heseltine Review a single fund will be made available for local enterprise
  • Two major carbon capture and storage projects will be taken to the "next stage"
  • There will be new incentives for the low emission vehicle industry
  • Support for energy intensive industries will be extended beyond 2015
  • There will be a "generous" new tax regime for shale, to promote early investment.  New planning guidance will also be published to ensure that local communities benefit from shale exploration. 
  • Employee share ownership is to be extended and capital gains tax relief for sale of business to employees
    • A new "employment allowance" worth £2,000 for small businesses will begin in April 2014. The chancellor says he is removing a barrier to small businesses hiring staff.Up to £2,000 is to be cut from employer National Insurance Contributions
    • There will be the abolition of Stamp Duty on shares

Tax 

  • From April 2015 the main rate of Corporation Tax is to be reduced to 20%
  • The bank levy rate will increase to 0.142%
  • There will be new measures to tackle tax avoidance with "one of the largest ever packages of tax avoidance and evasion measures presented at a Budget". The Government will also 'name and shame' companies that avoid tax
  • New subsidies for childcare for working parents have been announced. "New tax-free childcare vouchers for working families will be brought in with: 20% off the first £6,000 of the childcare costs for each child
  • The Chancellor will also bring forward the overhaul of the pension system, a new single tier payment worth about £144 a week, to 2016
  • Proposed social care reforms will also be brought forward by a year to 2016 with a slightly lower cap of £72,000 down from £75,000
  • The personal allowance will be raised to £10,000 in 2014.

Home Ownership

  • £3.5bn over the next three years for shared equity loans will be offered to anyone looking to move up the housing ladder for those with a 5% deposit though the 'Help to Buy' scheme.  This is available to all, not just first time buyers.
  • Equity loans will be made of up to 20% to cover deposits on new homes
  • A new mortgage guarantee to support lenders in offering mortgages for higher loan to value mortgages. These will be able to support £130bn of mortgages.

Duty

  • The fuel duty increase which was due to take place in September has been cancelled
  • Alcohol duties will increase with the exception of beer.  Beer duty will be cut by 1p.

Cookies We use cookies to ensure that we give you the best experience on our website. To find out more about our cookies policy, see our cookies policy here or in the footer.