Autumn budget 2024: What it means for the local housing market

October 31, 2024

The Labour government’s recent Autumn Budget, led by Chancellor Rachel Reeves, delivered significant updates that will shape the housing market in 2024 and beyond. From stamp duty adjustments to new affordable housing initiatives, here’s a breakdown of the key changes and how they could impact buyers, sellers, and investors in our local area.

Stamp duty on second homes
One of the most notable changes is the increase in stamp duty on additional homes, up from 3% to 5%. This shift may affect property investors and second-home buyers who now face an added 2% on the property cost. New rates apply as follows:

£0 – £250,000: 5%
£250,000 – £925,000: 10%
£925,000 – £1.5m: 15%
Over £1.5m: 17%

First-time buyers and home movers: temporary relief
First-time buyers and home movers will continue to benefit from raised stamp duty thresholds until April 2025, after which a reduction is planned. First-time buyers can currently avoid stamp duty on homes priced up to £425,000, and home movers on those up to £250,000.

From April 2025, thresholds will decrease to £300,000 for first-time buyers and £125,000 for home movers. Locally, this could create a rush to purchase homes before April 2025, especially for those seeking to maximise savings on stamp duty.

Capital Gains Tax adjustments
Capital Gains Tax (CGT) rates are increasing for some assets but will remain steady at 18% and 24% for residential property sales, ensuring the UK remains competitive within the G7 in terms of CGT. This stability could encourage local property investors to hold onto their assets, especially given the potential for increased rental demand.

Funding boost for affordable housing
With £500 million earmarked for affordable housing, the government aims to tackle the ongoing supply issue. Over 33,000 new homes are planned as part of a broader £5 billion scheme to support both renters and small developers. Locally, these funds could bring new affordable housing opportunities, although experts emphasise the need for long-term solutions.

The Autumn Budget’s focus on housing shows a decisive step in reshaping the market. While higher stamp duties on second homes may reduce some investment, first-time buyers and movers benefit from ongoing temporary tax relief. The local market could see an uptick in new developments and heightened interest in rentals.

Ultimately, whatever your moving plans, you need an up-to-date valuation of your property and local insight to really understand what’s affordable and what the local demand looks like. Contact your local Mackenzie Smith branch today for informal advice and guidance. 

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