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Spring Budget Announcement

Spring Budget Announcement

Jeremy Hunt laid out his economic plans in today’s Spring Budget. With highly-anticipated announcements surrounding energy bills and childcare support, how will today’s statement impact the property sector?

Just four months ago, Jeremy Hunt issued his Autumn Statement, or rather, his rectifications to the Kwasi Kwarteng and Liz Truss mini-budget that caused economic fallout. Since then, confidence in the money markets has returned, and there is a positive outlook for mortgage interest rates and the wider property sector.

Today, we heard Hunt’s much-anticipated Spring Budget announcement. From pensions and fuel duty changes, to childcare and energy bills support, many property investors will be keen to hear how today’s budget could help them. Most importantly, they will hope to see what the Chancellor has put in place to help boost the property market.  


Energy Bills

Landlords have had to deal with rising energy costs on their own homes, as well as on their investment properties. Lower-earning tenants have struggled most to meet these price increases, which has put more pressure on landlords to help cover these extra costs. In today’s budget, Hunt acknowledged the continued financial difficulties many families and renters face. Consequently, the Energy Price Guarantee will remain at £2,500 for the next three months, allowing for a further £160 worth of household savings.

Rising energy bills have, of course, impacted everyone, but those on pre-payment metres continue to face higher costs than families on direct debits. Today, Hunt introduced a scheme which will help support your tenants who need it most, by bringing pre-payment charges in line with comparable direct debit bills.

These measures will go some way to reduce the financial stress of tenants and landlords, reducing rent arrears and income interruptions.


Investment Zones

A scaled-back plan based on Liz Truss’ levelling up Investment Zones will see just 12 designated areas, rather than hundreds. Under Hunt’s plans, each zone will access £80 million of support over five years, including tax incentives for businesses.

Touted as “the new Canary Wharfs”, these zones will be focused around universities. Currently, the shortlisted areas list include the East Midlands, Greater Manchester, Liverpool City, the North East, South Yorkshire, Tees Valley, the West Midlands and West Yorkshire.

These investment zones will offer property investors significant opportunities to provide rental housing and commercial business units for the areas. We eagerly await news on the specific locations of these investment hotspots.


Corporation tax

The planned increase of Corporation Tax from 19% to 25% will still go ahead in April. The full 25% rate will only apply to businesses with taxable profits above £250,000, an estimated 10% of companies. According to predictions, around 70% of businesses won’t see increased tax bills under the new rates.

Companies with profits between £50,000 and £250,000 will pay between 19% and 25%. Despite this tax rise, the UK still has the lowest Corporation Tax rate in the G7.

However, a new announcement in today’s budget means businesses can deduct investment costs for new IT equipment and other machinery from taxable profits.

For full details of the impact on your business, please seek professional tax advice.



The annual tax-free pension allowance will increase from £40,000 to £60,000 from 6th April 2023. The change means you can pay up to £20,000 more into your private pension per year, without a tax penalty.

Furthermore, the Government is abolishing the pension Lifetime Allowance. This limit meant that individuals could only pay up to £1,073,100 into a private pension before paying additional tax.

The Government’s pledge to increase state pensions in line with inflation (10.1%), announced in November, still stands.  

Despite speculation, there was no announcement on increases to the state pension age. However, for those born after 6th April 1960, the state pension age will likely increase to 67 by 2028, and 68 around 2044.


Fuel duty

Reduced initially in March 2022 following significant increases when Russia invaded Ukraine, the Government will extend the 5p cut to fuel duty for another year. It’s estimated this will save the average driver £100 a year in fuel costs.


Alcohol duty

From 1st August, draft duty will be up to 11p cheaper in pubs than in supermarkets, incentivising pub visits and boosting public house owner profits. This is in addition to plans to reduce the duty on alcoholic drinks below 8.5% and a 12.5% tax for all wines with alcohol content between 11.5% and 14.5%. These measures will run for 18 months, starting from August 2023.

Following reports that more than 32 pubs in England and Wales closed every month during 2022 due to rising costs, these measures will help save what is often considered a British institution.


Public Sector Pay

Below-inflation pay offers have resulted in an abundance of strike action across multiple public sectors, including nurses, paramedics, teachers, civil servants, and rail workers.

Whilst there had been some speculation around the Chancellor announcing some back-dating of pay, Hunt made no such announcements today.


Childcare support

Jeremy Hunt introduced a series of reforms around childcare to help better support struggling parents, particularly women, to re-enter the workforce.

These include a £600 incentive for childminders signing up for the occupation, and increased funding of £204 million for childcare providers to prevent further increases to fees.

An increased fund will become available to schools and local authorities to expand the supply of wrap-around care at school. With this increased funding, the Government aim for all schools to wrap-around around care by September 2026.

Furthermore, and perhaps the most highly-anticipated, the Chancellor will extend the weekly 30 hours of free childcare, currently only for three- and four-year-olds, to children from the age of 9 months. This significant policy extension is designed to help more eligible parents return to the workforce, boost household incomes and the UK economy, and reduce childcare costs by nearly 60%.

UK childcare costs are among the most expensive in the world (full-time fees for a child under two reaching an average of £269 a week, equivalent to £14,000 annually), so this will come as a relief for millions of parents struggling to balance the finances.


Back to work drive

The Chancellor announced a major set of reforms to kickstart the Government’s plan to get more people into the workforce. Focused on those with disabilities or long-term illnesses, a ground-breaking new White Paper is to be published on disability reform, as well as an inclusive new programme, Universal Support. This voluntary employment scheme will help fund 50,000 job placements for disabled workers each year.

With a focus on removing barriers to strengthen our society and economy, employers will receive more support to prevent those with mental illnesses from needing to leave work early and provide children in care with the tools they need to have a successful career.

Further sanctions are to be put in place for those on Universal Credit without health conditions who don’t reach minimum job search standards.


Income Tax and National Insurance

There are currently no plans to change the current Income Tax and National Insurance thresholds. This is likely due to the delicate state of the economy, which, while recovering, is not out of the woods yet. Sunak vowed to cut these personal taxes once the economy starts to grow.



Hunt did note that the Government supports the Monetary Policy Committee’s (MPC) efforts to reduce inflation, and the expectation is for inflation to fall from 10.7% at the end of 2022 to 2.9% by the end of 2023.

If inflation significantly drops to this level, it will reassure landlords of the security of their property investments. Furthermore, this positive economic outlook may encourage more landlords to remain in the sector.


Where does this leave property investors?

The NRLA called upon the Government for a full review of the taxation on privately rented housing, after 30% of landlords said they planned to sell their properties. Primarily, the landlord association encouraged the Treasury to examine the combined impact of recent taxation, including the restriction of mortgage interest relief, the 3% stamp duty levy on purchasing homes to let, and the hike in Capital Gains Tax after the Autumn Statement.

In today’s statement, the NRLA hoped to see some pro-growth tax measures to incentivise landlords to remain in the sector and further develop their property portfolios. However, regrettably, no such measures were taken.

Ben Beadle, the chief executive of the NRLA, commented: “The harsh truth is that the Government’s efforts to discourage investment in the sector are working. But punitive taxation alongside record demand for rented housing is a disastrous combination that serves only to hurt renters – it is time to change tack.

“The Treasury needs to undertake a comprehensive review of the taxation of the rental market and introduce pro-growth measures to support renters to access the homes they need”.

Today’s budget announcement offers some financial relief to many UK households, which is welcome following months of raging inflation. We hope it’ll go a long way to reduce rent arrears for landlords in both the residential and commercial property markets and ease some of the concerns in the community.

However, despite Hunt’s messages of ‘enterprise’ and growth, the Government has failed to consider how providing safe, affordable housing is an integral part of our economy’s success. The continued punitive measures against landlords will hamper the full potential of the UKs economic recovery, as many will continue to struggle to secure one of life’s very basic needs: housing.