Chancellor Jeremy Hunt recently unveiled his 2023 Autumn Statement, which outlines fiscal plans for the upcoming year. Amongst everything discussed, consumers are left with lacklustre coverage of the housing market, as it appears to have missed the spotlight once again. Let’s dissect the key points mentioned by the Chancellor, and what they mean for the real estate landscape.
Stamp Duty: No Change There
One of the most disappointing things for viewers was that the Stamp Duty rules remain unchanged, The threshold for exemption on homes up to £250,000 persists, but come 2025, it’s set to revert to £125,000. First-time buyers enjoy relief unless their property surpasses £425,000. Additional levies for second-home buyers and landlords stand at 3%. Though rumours swirled about potential Stamp Duty adjustments, the Autumn Statement offered no amendments, leaving the market to ponder whether changer may materialise in the next budget.
Mortgage Guarantee Scheme: An Extension
For many a silver lining, the Mortgage Guarantee Scheme has been extended until June 2025. Geared towards aiding first-time buyers, this scheme facilitates lenders in offering up to 95% loans, allowing buyers to put down a 5% deposit. The extension aims to sustain support for prospective buyers with smaller deposits, fostering continued accessibility to homeownership. However, the scheme’s limitations raised concerns for many, including the restriction of qualifying loans to 4.5 times income. Whilst this was put in place to ensure responsible lending, it may limit the amount people can borrow, thus affecting their ability to purchase properties in places with higher price points.
Mortgage Interest Tax Relief: The Status Quo
Landlords have been contending with the removal of mortgage expense deductions since April 2020. Instead, they receive a 20% tax credit on mortgage interest payments, impacting higher-rate taxpayers who previously enjoyed 40% relief. The Autumn Statement offered no reprieve for landlords, leaving them in a state of uncertainty amidst the ongoing challenges faced by the rental property market.
Housing Support for Low Incomes
A glimmer of hope emerged for those on low incomes as the Local Housing Allowance was unfrozen. The rate is set to increase to the “30th percentile of local market rents”, providing support to 1.6 million households with an average boost of £800 next year. While this represents a positive step, the broader housing market concerns remain unaddressed.
Housebuilding: A Modest Allocation
A £450million allocation to the local authority housing fund aims to deliver 2,400 new homes. However, the absence of dedicated policies to stimulate property transactions leaves homebuyers, homeowners, and landlords yearning for more comprehensive measures.
In conclusion, the 2023 Autumn Statement, despite its focus on economic growth, leaves the housing market largely unattended. The continuation of existing schemes provides some stability, but the lack of significant changes raises questions about the government’s commitment to addressing the pressing issues affecting the real estate landscape. As the rumour mill churns, stakeholders await the next budget in anticipation of potential reforms that could shape the housing market. With OneDome’s HomeBuyer Service, you will be assigned a designated Property Moving Assistant who will help alleviate the stress of your property journey. Any curveballs thrown into the mix by both this statement and future announcements will be taken into account by your mortgage conveyancer, estate agent and conveyancer, all of which will be asily accessible through our DealRoom feature once you get started on a property.