In the Chancellor’s first budget, Rishi Sunak was at pains to make clear it is a ‘temporary disturbance’ that we are experiencing due to the knock on impacts of COVID-19. And he was indeed very keen to ‘get it done’ on manifesto promises.

He was in close contact with the Bank of England leading up to yesterday’s budget. So the 0.5% base rate cut, introduction of the SME term funding scheme (loans for small businesses) & counter cyclical buffer being released (reduction in amount of money banks need on deposit to cover losses), means money will keep flowing and should give companies and markets the confidence to ride out this period.

Specifically on COVID-19:

For interruption to workers and businesses there was a 3 point plan:
1 – Whatever resource NHS needs it will get. “Millions or Billions” for supplies and research in order to combat the virus.
2 – If people fall ill they will support them. Statutory sick pay will be introduced from day 1 to anyone who self-isolates. For Self Employed workers, certain benefits will be paid from day 1 with no need to attend a job centre.
3 – £500 million hardship fund for local authorities to use as they see fit.

Plus many other measures such as ‘time to pay’ agreements with HMRC, Loan facility to small businesses, of which the Govt will offer an 80% guarantee on any losses which will ensure money gets to where it needs to go.

Specifically for property/mortgages:

– Social housing interest rates cut by 1% to help lending.
– £1.1bn for house infrastructure fund – which should equate to 70,000 new homes.
– £400m fund for local Mayors to build on brownfield sites in their regions.
– Updating of planning rules.
– £650m to help the homeless – which will equate to 6000 more places for rough sleepers.
– Stamp duty surcharge on International Buyers of 2% from 2021.
– ‘High-Rise’ fund of £1bn – which is the creation of a new Building Safety firm – not just to focus on ACM, but all unsafe cladding on buildings above 18m high, both social and private.

Other Notable Announcements:

The OBR (Office for Budget Responsibility) upgraded growth estimates to 2.1% in 19/20 and in later years, which gave way for some tax cuts to National Insurance and a rise in the ‘living wage’. Although Corporation Tax held at 19%, which is the 3rd lowest in the G20.

A real focus on greener entrepreneurs with many tax penalties for ‘dirty’ fuels and industries and many tax cuts for green jobs and schemes such as flood defences. Including £500m towards more fast charging electric car hubs.

As expected, lots of plans around infrastructure projects and schemes to support areas outside of London and the South East. Including £640m for Scotland alone.

A large commitment to R&D schemes, up to £22bn focused very much on sciences and green industries.

The reduction of Entrepreneurs relief from £10m to £1m is a real kick in the aspirations of many business owners… like ones who own mortgages brokerages…


A quiet budget for housing, which was expected. The only notable announcement was that of the 2% additional charge to foreign buyers in the UK from 2021. Still time to move ahead of that coming in, but that will undoubtedly affect the central London market in the long term.

Market Reaction

Budget reaction |  A temporary disturbance

Best Rates:

2 Year Variable from 1.24%
2 Year Fixed Rates from 1.14%
5 Year Fixed Rates from 1.41%
BTL Rates from 1.19%

The actual rate you will be offered will be dependent on your personal circumstance and deposit level. Please speak to one of our advisers so that they can guide you through this process
Source: Twenty7Tec Feb 2020


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