Budget and a brew. ☕️ Viewed from our desks in Canterbury, this week's Budget announcement has gone down like a cup of lukewarm tea. Welcome, in that, someone finally put the kettle on and found the mugs; but ultimately a bit of a tepid, unfulfilling gulp of fiscal refreshment that leaves us all, well, a little pale.
Holiday letting, to continue our hot drink analogy, needs some of the strong, business forward thinking to allow it to steep over a long period of time.
Instead, in recent years we’ve seen nothing but hot water poured on the industry with the FHL tax regime changes coming in 2025 and the changing rules around registering holiday lets. This has cumulated in a rise in the number of holiday lets being sold recently no doubt in anticipation of choppy waters to come.
Some of this week’s budget-busting moves that are coming straight for us all in the hospitality sector include the minimum wage rise, up 6.7% to £12.21 per hour. Whilst good news for anyone starting out, for an industry dependent on reliable cleaners, delivery drivers, bar staff in the local (award-winning) pub and local retail, this will make many, typically smaller, employers put down their pints for a while. Although they have saved themselves 1p on said pint so maybe it’s not all bad.
On a similar note, we welcome the decision not to entirely remove the business rates relief from the hospitality sector. Some sense has prevailed here and the phased 40% reduction will ease some of the pain still being felt by the high streets who have yet to re-shape themselves fully post covid.
At the other end of the financial scale, the stamp duty rise to 5% from 3% on second home purchases won’t raise much cheer but investors looking to own a portfolio aren't at the top of this government’s ‘must-please’ list. Yet not all of No 11’s moves necessarily put off the investors and owners who come to us for advice when they’re looking at property.
Why? Because our investors think as we do, that investment in holiday lets is for the long term. We’re looking for owners who are prepared to invest their time and money into property that is, in turn, handled with proper care and attention by us over years not months. As a sector, we may not be the Chancellor’s cup of tea right now, but our contribution to the rural, coastal and small city economies in Kent & Sussex is not to be underestimated. The lowering of the National Insurance threshold to £5000 is another blow not only to us but to all small (ish) businesses. Thumbs down on this one from us, Madam.
This budget wasn’t for us necessarily, but, at best, if it helps stimulate a return to business confidence amongst the wider UK population it may, in turn, just help more kettles boil hot whether you’d choose to be in a shepherd’s hut or a beach house in the next few months. That’d really be worth a cuppa.
#Budget2024 #HolidayLetting
