The UK’s 2024 Autumn Budget delivered a variety of measures aimed at addressing the housing market, focusing primarily on investment in housing supply and changes to taxes on second homes.
While these steps may affect property dynamics in the coming months, several anticipated initiatives were notably absent, leaving many potential buyers and sellers still navigating high entry costs. Here’s a breakdown of what was—and wasn’t—covered in this year’s budget that could affect those looking to buy or sell a home.
New Stamp Duty Surcharge on Second Homes
One of the most significant announcements for the property market was the 3% rise in the Stamp Duty surcharge on second homes, which has jumped from 2% to 5%.
This measure could cool the demand for additional properties and lead to more homes being available for first-time buyers and primary homeowners.
However, it will affect those interested in property investment, holiday lets, or buy-to-let properties, which are often popular as income-generating assets.
£5 Billion Investment in House Building
In the budget, Rachel Reeves also committed £5 billion to new housing development, with the aim of increasing the supply of homes and addressing affordability issues over the long term. This move could potentially help ease pressure on the housing market, particularly in high-demand areas where prices have risen significantly due to limited availability.
For first-time buyers and those looking to move up the property ladder, the increased supply of homes may provide more options, with potentially competitive pricing as new properties come onto the market. However, it will take time for this investment to result in completed homes, meaning its immediate impact may be limited for those looking to buy soon.
What Was Missing: No Reduction in Stamp Duty Thresholds
Many buyers were anticipating confirmation of a reduction in the stamp duty threshold, bringing it back down from £425,000 to £300,000.
For now, first-time buyers can continue their property search at houses up to £425,000 without having to worry about stamp duty. It is unclear however how long this will be the case, as many expect this lowered threshold to take effect from April 2025.
Absence of the “Freedom to Buy” Scheme
Another notable absence in this Budget was the absence of the anticipated “Freedom to Buy” scheme. The new government has pledged to launch this initiative as a permanent mortgage guarantee scheme, intended to help renters transition to homeownership by offering 100% mortgages with the government as guarantor. Though details remain sparse, it’s expected to follow the framework of the existing mortgage guarantee scheme, providing support for those who may struggle with large deposits but can demonstrate financial responsibility through consistent rent payments.
The 2024 Autumn Budget Impact On Home Buyers & Sellers
The 2024 Autumn Budget suggests that the government’s strategy is to tackle housing affordability by increasing the supply of homes rather than introducing immediate relief through reduced taxes or support schemes.
For those looking to buy or sell a home, this means the landscape remains largely the same in terms of upfront costs. However, with higher stamp duty surcharges on second homes and a focus on building new properties, there may be a subtle shift in market dynamics.
Sellers could see sustained or increased interest from first-time buyers and primary home buyers, especially if investor interest in second homes decreases. Over the coming years, the £5 billion investment into housebuilding might also support price stability, creating a more balanced market.
In summary, while the Autumn Budget offers a vision for future affordability through housebuilding, it leaves immediate barriers to homeownership largely untouched. Buyers and sellers may want to plan accordingly, staying informed of potential long-term shifts as new housing projects come into play.