Housebuilders and hospitality firms were among the big winners from chancellor Rishi Sunak’s 2021 budget (3 Mar).

Most of the major announcements had been revealed in advance and stocks in the housebuilding and travel and leisure sectors rose ahead of the budget and consolidated those gains as generous support was confirmed. The lack of major surprises saw the domestic-focused FTSE 250 broadly unchanged from the gains it enjoyed intra-day ahead of Sunak’s speech.

The stamp duty holiday on property transactions below £500,000 was extended until the end of June and the threshold will be double the normal level at £250,000 until the end of September.

The mortgage guarantee scheme will support products which require a 5% deposit with several major lenders primed to offer these from April onwards.

What the budget means for private investors

• Lifetime allowance on pension tax relief, annual exemption on capital gains tax and inheritance tax threshold frozen for five years.

• Annual ISA and Junior ISA limit frozen at £20,000 and £9,000 respectively for the coming tax year.

“Sunak has started a fiscal ice age by freezing the tax rate thresholds.”

Rachael Griffin, tax and financial planning expert at Quilter.

There were replacements for the current government loan schemes and extensions to the business rates and VAT relief offered to the leisure and hospitality sectors. While a plan to offer companies 130% of the cost of business investment in tax relief was eye-catching.

In order to restore the public finances there was also a widely trailed increase in corporation tax, though not until 2023.

According to Vivek Paul, UK chief investment strategist, BlackRock Investment Institute, the attempt to balance the books ‘doesn’t herald a return of the austerity seen after the global financial crisis, in our view’.

He added: ‘The extended furlough program, continuation of the Universal Credit uplift and other extensions of Covid relief packages are essential to minimizing long-term damage.

‘Rapid vaccine roll-out has enabled the government to plan a route out of lockdown which we think will enable economic activity to return to pre-Covid levels by the end of this year – strengthening our conviction to be overweight UK equities on a six-to-12-month horizon.’

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