Spring Budget 2022: Impacts on the Property Market in the UK

How the spring 2022 budget affects the property market

The 23rd March saw the Chancellor deliver his Spring Budget to the nation. The Spring Budget sets out the Government’s plans for the coming year and outlines how the economy is performing. So what are the impacts on the property market in the UK?

What’s the property market doing? The UK property market has experienced several changes over the past few years, and the Government’s latest announcements will have a range of impacts on the market.

This time last year the Chancellor was delivering a budget where there was actually rather a lot that could impact the mortgage and property world.

It looked pretty good for buyers and the stamp duty holiday was extended.

Rishi Sunak had made a big promise that the government’s intention was to ‘turn generation rent into generation buy.’ It intended ‘to support this promise, with the introduction of the 5% mortgage scheme.’

This year he intends on, “Delivering greater economic security for our people, accelerating growth and productivity, and making sure the proceeds of that growth are shared fairly.”

In this article, we’ll be exploring how some of the key announcements from the Spring budget have potential impacts on the UK property market in 2022.

What’s the good news for the property market in the UK?

Whilst there have been no direct announcements for the property market and mortgage industry there are knock-on effects to the sector.

With the cost of living rising it’s reassuring that the Chancellor has made efforts in his budget to try to offset and curb these issues.

It’s been a rocky start to the year with inflation reaching 6.2% in January and expectations for it to rise to 8% in the summer.

This has naturally been the outcome of issues with global supply for certain goods and the rise in oil/gas prices.

So what’s been put in place that could affect mortgage borrowers?

Coupled with inflation, the growth forecast for the economy for 2022 was measured at 6%. However, with the high level of economic uncertainty, this has now been reduced to 3.8%.

Economically the news isn’t fantastic but it’s reassuring that it’s still expected to do well.

As we said, the bulk of the budget was around measures that will offset the cost of living crisis.


Because a higher cost of living will mean higher inflation, and with higher inflation, the Bank of England starts to raise its interest rates.

The key impacts and takeaways for an average household are:

  1. Fuel duty was cut by 5p for the next 12 months. This on average would mean a saving of £2 to fill a tank.
  2. 12.5% VAT discount for the hospitality industry will continue
  3. Although National Insurance increases to 1.25%, National Insurance (and income tax) won’t apply until you’re earning £12,570. This means a better take home for those on a lower income. What’s more is that the Chancellor has also promised a cut to basic rate income tax by 1p by 2024, again increasing take-home pay.

There were also inclusions into the budget that will see a direct impact on homeowners:

Announcements that EPC ratings for newly-let properties will need to be C or higher by 2025 were coupled with the announcement that the Government is now offering to reduce VAT to zero on things like solar panels, heat pumps and insulation.

It was rumoured that additional Stamp Duty Land Tax for second homeowners would increase from 3% to 4%. There has been no increase in this budget.

What else could affect you?

The bank of England in March raised interest rates from 0.5% to 0.75% in a bid to ease inflation.


Because interest rates are the only tool they have to influence inflation rates to which they have a target of 2%.

For the property market in the UK this means if you’re on a mortgage that charges you a variable interest rate, you might find that the cost of your repayments goes up. If you’re on a fixed rate you won’t see any change until the end of your fixed period.

It’s worth noting that the Bank of England review’s the economy to make informed decisions on interest rates. They are allowed to review and make changes up to 8 times a year (every 6 weeks).

How does this fair against our 2022 predictions for the property market?

What’s the property market doing? At the start of the year we predicted that we wouldn’t see ‘more of the same’ as we had in 2021, interest rates would rise throughout the year by a small amount and house prices would increase to even out to a rate less than the 10% we saw in 2021.

Office for Budget Responsibility (OBR) suggests that while we’ll likely see a price increase of 7.4% this year, it will only increase by 1.3% next year (which could be good news for first-time buyers).

We don’t see anything to suggest our predictions should change right now. There is no reason to delay buying a house if you are confident you could afford higher mortgage rates and living costs.

So, once you’re ready to start looking at mortgages or even want advice and help with what you can afford contact us at Online Mortgage Guru on 0345 3669799 or email us via info@theonlinemortgageguru.co.uk and we will put you in touch with a suitable specialist to handle your enquiry.

Let’s get you on the property market in the UK now!

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