Today Rishi Sunak delivered the highly anticipated Summer economic statement, or ‘mini-budget’ for 2020. It was expected to deliver a lifeline to businesses and stimulate the economy, but did it deliver?
The initial response is a resounding ‘yes’. The Government announced £30billion of extra spending to support a jobs retention bonus, incentives to hire apprentices, a kickstart scheme to get young people into employment and a 15% drop in VAT for the food, accommodation and attraction industry (down to just 5%). There was also an ‘Eat out to Help out’ scheme announced offering a 50% discount to eat out in participating restaurants between Monday and Wednesday.
And the housing front wasn’t left behind. Currently homeowners pay stamp duty on any home over £125,000, except for first time buyers who don’t pay stamp duty up to £300,000. Today the Chancellor announced that stamp duty will be cut, and the new threshold will be £500,000 for property sales in England and Northern Ireland. Based on last year’s property sales from Zoopla the new stamp duty could benefit up to 89% of people purchasing homes. So, it’s a pretty significant cut.
And now it’s time to see what happens. The new stamp duty starts immediately and will run until 31 March 2021. It’ll be interesting to watch the impact on the property market between now and next year and see how the banks and mortgage lenders react to the news. Watch this space!