How Does The Spring Budget 2023 Impact UK Property Investors?

On Wednesday 15th March, Chancellor Jeremy Hunt announced his Spring Budget for 2023. As expected, it featured significant changes to taxes and spending that affect property investors in the UK. Let’s take a look at some of the ways this budget will impact them. 


What Does The Spring Budget Mean For The UK Housing Market?

Contrary to Zoopla’s take on how the Spring Budget will affect the UK housing market, we believe there will be a noticeable positive impact for property investors. This is because our definition of a property investor differs. Zoopla’s idea that there is ‘little direct impact’ may apply to average buy-to-let landlords, however, being a landlord does not automatically make you a property investor.

The average buy-to-let landlord makes £15,000 a year before tax, meaning that a whopping 97% of landlords still have to work.

Redmayne Smith define a property investor as somebody who is actively working to replace their income. Rather than seeing their portfolio as a supplementary income, investors actively put in the effort needed to understand the market and take it to the next level. Investors take time to understand how to purchase property purposefully and manage their portfolio and profits efficiently. This spring budget has some fantastic news property investment if you know what to look for.


What Are The 2023 Spring Budget Highlights For Property Investors?




Why Is Lower Inflation Good For Property Investors?

The Bank of England base interest rate has been increased nine times since the beginning of 2022, in an effort to combat inflation. Mortgage rates are based on this figure. Consequently, any investors that borrowed funds to increase their portfolio faced paying more in interest and lower return on investment.

Lower inflation means that further interest rate rises are unlikely and interest rates will come down, resulting in cheaper mortgages. Combined with huge shortage of homes on the private rental market and competition pushing up rents, yields on buy-to-let properties are set to rise.


How Do Increased Capital Allowances Benefit Property Investors?

The scope and size of corporation tax savings has vastly improved. Expanded capital allowances include full expensing for year one. The list of what is deductible has also broadened to include fixtures such as kitchen and bathroom fittings and fire alarm systems, amounting to huge savings for those investing in serviced accommodation. The process to claim has also been made simpler and quicker. Less tax means more profit in your pocket.


Why Is Abolishing Pension Taxes Great News For Property Investors?

The spring budget brought great news for those using a SIPP or SSAS to invest in UK property. The previous lifetime pension contribution limit has been lifted, so you no longer have to worry about paying huge amounts of tax on full pension pots. You can also pay an additional yearly amount of £60,000 a year into your pension pot tax-free, a 50% increase on last year. Investors will now be able to expand their property portfolios through their pensions more quickly and benefit from the increased income.


Is The Spring Budget Good News For Property Investors?

Lower mortgage rates, bigger capital allowances and huge savings on pensions taxes are all fantastic news for property investors. All of these equate to more money to put into a property portfolio and greater returns in the long run.

If you are a serious property investor looking to build wealth without the hassle, book a consultation now.


Cara Dutfield

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