Budget 2016 – the effects on UK housing

Posted 16 March 2016 by Keith Osborne

Some of today's Budget announcements related to the UK property market, the WhatHouse? team summarises the main points...

Chancellor George Osborne has presented his eighth Budget and among the many new announcements are a number of factors affecting the UK’s homeowners, house-hunters, housing market and property industry.

The key points are:

Buy-to-letThe 3% surcharge in stamp duty on buy-to-let and second homes announced in last year’s Autumn Statement is confirmed, applicable on all transactions from 1 April 2016. Osborne was expected to provide more details about the scheme, but only confirmed that larger investors would not be exempt.

Housebuilding and new homes£1.2bn has been found to help release brownfield land to build 60,000 homes over the next four years - half at market rate, half as part of the government's discounted Starter Homes Initiative


The Chancellor has previously announced a change to tax relief on buy-to-let mortgage interest. Phasing in from 2017, relief for higher-rate tax payers will be limited to the basic rate of 20%. He made no further reference to this today.

A new Lifetime ISA is being introduced from April 2017, giving a single product for anyone aged up to 50 to save up to £4,000 per annum with a 25% bonus from government - effectively tax-free saving. The money can be used for saving for a deposit for a home, much like the recently introduced Help to Buy ISA. 

InsuranceAn increase in Insurance Premium Tax (IPT) of 0.5% will probably lead to an increase in home insurance costs for many.

Help to Buy/Shared OwnershipOsborne pledged 135,000 new Shared Ownership homes by 2021 in the last Autumn Statement, and the increase of the maximum household income for Shared Ownership eligibility to be raised to £90,000 this year. He also introduced Help to Buy London earlier this year. No further announcement was made today on either of these popular schemes.

OtherCrossrail 2 is approved, with a possible effect on property prices around the proposed link from south-west London to north-east London

£700m has been earmarked to provide further flood defences to protect tens of thousands of homes across the UK

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