UK Budget 2024

How the Autumn Budget Has Affected the Property Market

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The Autumn Budget 2024, unveiled by Chancellor Rachel Reeves on 30th October, has certainly stirred the pot—especially within the property sector. With sweeping changes to tax policies, fresh funding for housing initiatives, and tweaks to support schemes, this Budget isn’t just another political announcement; it’s a significant shift that could reshape the landscape for buyers, sellers and investors alike.

Why all the fuss? Well, the property market isn’t just about bricks and mortar; it’s the bedrock of the UK economy. It touches our personal finances, influences job markets, and even sways economic growth. So, let’s dive into the key measures from this Budget and see how they’re shaking things up.

Key Changes in the Autumn Budget Relevant to Property

Stamp Duty Land Tax (SDLT) Adjustments

First off, there’s a notable hike in the SDLT surcharge on additional properties—jumping from 3% to 5%, effective immediately from 31st October 2024. This isn’t small change. If you’re considering buying a second home or investing in a buy-to-let, your transaction costs just went up.

That’s not all; Come April 2025, SDLT thresholds are set to revert to their previous levels. For first-time buyers, the exemption threshold will drop from £425,000 back down to £300,000. The standard SDLT threshold for all buyers will decrease from £250,000 to £125,000. In plain terms, the tax-free portion of your property purchase is shrinking. It’s no wonder folks might be scrambling to close deals before these changes kick in.

Capital Gains Tax (CGT) Reforms


Next up, Capital Gains Tax is getting a makeover:

  • Basic rate taxpayers will see CGT rise from 10% to 18%.
  • Higher rate taxpayers will experience an increase from 20% to 24%.


For property investors and landlords looking to sell assets, this is a big deal. It means more of your profit is headed to the taxman. Careful planning just became even more crucial.

Housing Initiatives


On a more positive note, the government is injecting an extra £500 million into the Affordable Homes Programme. This isn’t just a drop in the bucket; it’s a substantial investment aimed at accelerating the construction of affordable housing. For developers and those struggling to get on the housing ladder, this could be a beacon of hope.

Additionally, energy efficiency grants are being rolled out to support landlords and homeowners in making eco-friendly upgrades. Not only does this align with sustainability goals, but it also enhances property values and can lower running costs. It’s a win-win.

Mortgage Market Support


Good news for first-time buyers: the Mortgage Guarantee Scheme, which assists with 95% loan-to-value mortgages, has been extended. In a climate where affordability is tightening, this measure could be the helping hand many need to step onto the property ladder.

Impact on Key Stakeholders

UK property market

Buyers


So, what does all this mean if you’re looking to buy? There’s a mixed bag of challenges and opportunities. On one hand, the current SDLT thresholds offer short-term savings. If you act fast, you could avoid higher taxes. On the other hand, once the thresholds drop post-April 2025, affordability could take a hit. The extension of the Mortgage Guarantee Scheme is a silver lining, but timing is everything.

Sellers


For sellers, the next few months could see a surge in buyer activity as people rush to beat the SDLT deadline. It’s a seller’s market—for now. After April 2025, we might see a slowdown, making strategic pricing and savvy marketing more important than ever.

Investors and Landlords


Investors face some tough choices. The higher SDLT surcharge and increased CGT rates mean purchasing and selling properties just got more expensive. Expanding your portfolio? Disposing of assets? You’ll need to crunch the numbers carefully. But don’t overlook the energy efficiency grants—they offer a chance to improve your properties, boost rental yields, and add long-term value.

Regional Implications


The extra funding for the Affordable Homes Programme is likely to benefit areas most in need of affordable housing. This could revitalise regions outside the usual hotspots, creating fresh opportunities for buyers and investors alike. Regeneration projects might make up-and-coming areas the next big thing.

Challenges and Considerations


Higher transaction costs due to increased SDLT and CGT could put off some buyers and investors. And if property prices rise in high-demand areas, affordability issues could worsen.

That’s why strategic financial planning is more important than ever. Whether you’re buying, selling, or investing, it’s time to take a hard look at your plans and maybe consider getting some professional advice.

Actionable Tips


For buyers, the key is to act swiftly to complete purchases before the SDLT thresholds drop, ensuring you benefit from the current tax-free portions. Additionally, exploring options under the extended Mortgage Guarantee Scheme could provide the necessary support to secure your desired property. 

Sellers should leverage the current surge in buyer activity by marketing their properties effectively, making use of professional staging and strategic pricing to attract the right buyers. 

Investors need to reassess their portfolios in light of the new tax changes, carefully evaluating the financial impact of increased SDLT and CGT rates. Taking advantage of energy efficiency grants can also enhance property value and appeal, making investments more lucrative in the long run.

The Takeaway


The Autumn Budget 2024 is more than a policy update—it’s a catalyst for change in the property market. Opportunities abound, but so do challenges. The key is to stay informed and act strategically.

Don’t navigate this evolving landscape alone. Contact Pantera Property for expert guidance tailored to the UK property market. With our experience and insights, we’re here to help you make the most of what lies ahead.

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