Today’s Budget and Rate Cut

This was the first budget from the new Chancellor Rishi Sunak and from a housing perspective, he majored on the provision of affordable and safe housing as a priority.  There was little new in the budget for private owner occupiers, landlords or tenants for whom the cut in interest rates looks far more significant. 

As expected there was no relief from the stamp duty surcharge imposed by George Osborne on second home buyers and landlords and in fact Mr Sunak also introduced a 2% stamp duty surcharge for non UK resident buyers from April 2021.

For private flat owners who find themselves in the unfortunate position of having a flat with unsafe combustible cladding, the Chancellor recognised the problem for leaseholders and pledged to create a £1bn fund to help remove this cladding from affected blocks.

The devil will be in the detail as usual.

On the social housing front, Mr Sunak announced an extension to the Affordable Home Programme with a new, multi-year settlement of £12bn and has cut interest rates on lending to local authorities for social housing by one percentage point. He also said that he will make more than £1bn of discounted loans available for local infrastructure with nearly £1.1bn of allocations from the Housing Infrastructure Fund to build 70,000 new homes in high demand areas across the country.


The move by the Bank of England to cut interest rates was not aimed at housing in particular, and it remains to be seen how much cheaper mortgages can actually get.  Lenders are already struggling to make any meaningful returns on much of their mortgage lending and rates of less than 1% have been on offer recently, even before the latest cut.

The move does however signal even more clearly than before that low interest rates are here to stay.

If savers are going to be getting, at best, interest rates of 0.75% or less, then the attractiveness of buy to let with yields of 5%+ looks set to tempt many first time landlords to invest and other investors to top up their existing portfolios.

Worries about the corona virus also sparked many of the temporary measures announced by Mr Sunak to help people who might find themselves struggling to pay their mortgages and rent as a result of illness or economic hardship.  These special benefit rules are welcome but we should remind landlords who rent their properties through Trigg & Co that they already
benefit from our exclusive Rent on Time guarantee – so they have no worries whether they will get their rent on the day it is due even if their tenants can’t pay.  We truly take the risk out of being a landlord.


As always, if you would like any help or advice on any housing matters, please feel free to contact Trigg & Co and speak to a member of my team.  Our advice is free and without obligation.

Keith Trigg
MANAGING DIRECTOR