What Does the Autumn Budget Mean for the Housing Market?
Chancellor Rachel Reeves has announced the Autumn Budget, marking the first Labour Budget in 14 years (and the first woman to ever deliver a budget in the UK).
With the ongoing cost of living pressures, many were closely watching this Budget yesterday. Below we summarise the key points that we feel our relevant to the property market.
* The Budget included a £5 billion investment in Labour’s housing plan, with £500 million going to the Affordable Homes Programme.
* The government will also invest £25 million to build 3,000 energy-efficient homes across the country, with a target for all of them to be affordable.
* The Capital Gains Tax on residential property stays the same.
* Additionally, the government will work with the mortgage industry to make the Mortgage Guarantee Scheme, which helps with loans that cover 95% of a property’s value, permanently available.
Changes to Stamp Duty
There was no mention of extending the current stamp duty relief for first time buyers, which ends in March 2025, however for second homes, such as rental properties and holiday homes, the stamp duty surcharge will increase from 3% to 5% starting 31 October 2024 (today!)
Capital Gains Tax Unchanged
Before the Budget, some landlords were selling rental properties due to talk of a potential rise in Capital Gains Tax. This tax applies to the profit made from selling assets like rental homes (it is important to note that it does not apply to the whole sale price of the property). Today’s Budget confirmed the tax rate for residential properties will remain the same, which is a relief for all second home owners as previous talk had indicated a significant rise.
Mortgage Market
The chancellor has focused her sights on the mortgage industry to make permanent the Mortgage Guarantee Scheme. Whilst mortgage rates remain relatively high, over the last 12 months they slowly been reducing by up to 1% which has ultimately had a positive impact of the market. Following the budget, we do expect this trend will continue over the months to come, especially if the Bank of England decide to reduce the interest rates in the coming weeks.
If you are thinking of moving and would like to know how much your home is worth, then telephone any of our local offices to arrange your FREE market appraisal. We can also help you with your budget planning if you are thinking of buying a new home, re-mortgaging or considering a buy-to-let property.
For all your property requirements, think of the Richard Kendall way.
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