Against a backdrop of financial ‘black holes’, changes to public sector borrowing rules and a Budget described as ‘fixing the foundations’, what are the key measures that will impact the UK property market in the cold light of day?

Capital Gains Tax, effectively the tax on long-held property profits, was increased in the Budget (effective immediately) but not for residential property, with rates for commercial property and other assets increased to match existing residential mortgage rates instead (at a 24% top rate). Across the board, increases were possible, which may be revisited in future Budgets. For now, investors will file this change under ‘could’ve been worse’.

Stamp duty was amended for residential but not commercial property investments. The Higher Rate for Additional Dwellings (HRAD) was immediately increased from 3% to 5%. This is part of the Government’s stated aim to protect and support residential property, and we will have to see if this and other measures are successful.

Building costs are likely to rise due to increases in workforce costs, rising minimum wage levels, and an employer’s national insurance increase and threshold change. These increase the cost per worker by over £600 per year, except for the smallest businesses. Trade issues surrounding a new US president may also increase some materials costs in the near future.

Interest rates are expected to fall more slowly following the Budget, and the pace may stall completely given the talk of tariffs and the impact on worldwide trade of the new US President. Finance costs, therefore, are unlikely to drop quickly.

The Government has made modest commitments to support the Affordable Homes Programme and other initiatives intended to support those struggling to secure suitable property or those in financial hardship. More is wanted from a property sector keen to supply to a nation with challenging targets on the creation of homes in the areas of planning and innovative property development and conversion.

The moderate CGT increase and lack of change for commercial property stamp duty highlight the possible attractiveness of commercial and semi-commercial property opportunities. For those with the right skills and experience, this marketplace, against a background of limited residential supply, is full of opportunity, especially with the right funding partner.