How do we end up in a situation where the OBR leaks the budget numbers an hour before Rachel takes the stand? Perhaps it’s just another calamitous chink in a system that doesn’t always feel fit for purpose.
That said, I have to be honest, I was relieved this budget wasn’t worse. I’ve lost sleep over the rumours that the Chancellor was targeting anyone with a house over Band F on the council tax roster. Yes, that would have affected me personally. But I’m many miles away from worrying about a tax on £2 million homes. However, this does affect my industry, our peers, our clients, and our communities.
Very few of our direct clients build homes over £2 million, but this new tax will have knock-on effects that ripple beyond the high-end market. With stagnation at the top, we’ll inevitably see a slowdown further down the buying chain. That said, we’ve got until 2028, so this may well prompt a flurry of early downsizing and the consequences that ripple from this.
Let’s be honest though, the UK housing market is resilient. After the initial shock, we’ll dust ourselves off and move on. I don’t believe this tax will stop wealthy buyers from purchasing larger homes; it’s an annoying frustration, not a deal breaker. Older buyers looking to downsize to a small coastal bungalow will still do so.
I think the 2% property tax on rental homes is more of a shockwave. It will hit landlords’ pockets hard and could make global investors hesitant to buy into UK Build-to-Rent schemes. If they look elsewhere for higher profits, we risk being left with housing stock that currently few can afford.
There were some real positives in today’s budget. SMEs and small businesses will benefit from free apprenticeships, helping bring young talent into the workforce, a boost that bodes particularly well for construction. Support for high streets is welcome; I don’t know a single one that couldn’t do with a boost. Investment in school libraries and playgrounds is hugely positive, although £18 million feels unlikely to stretch far across the 16,500 primary schools in England. 250 new health centres sounds great, though I’ve heard of GP redundancies recently, so the timing seems somewhat juxtaposed…
In true Oracle style, we will dust ourselves off and continue to champion all the positive and genuinely impressive work our clients deliver, all while hoping that Rachel Reeves has her maths in order.