How the 2024 Autumn Budget Will Impact the UK Property Market: Key Changes for Buyers and Sellers

With the recent Autumn Budget announcement, home buyers and sellers in Derbyshire can expect several changes that will influence property sales, prices, and the overall property market. From adjustments in Stamp Duty, to new incentives for housing development. New Oak Estates takes a closer look at what these changes mean and what steps buyers and sellers should consider. 

1. Increased Stamp Duty on Second Homes and Investment Properties

One of the most notable changes is the increase in Stamp Duty for additional properties, with the surcharge now at 5%, up from the previous 3%. This affects buyers looking to purchase a second home or buy-to-let property, particularly impacting those in high-demand areas like London and the South East. The increase aims to curb investment purchases in favour of owner-occupied homes but may discourage some buyers from investing in additional properties. 

Considerations for Buyers and Sellers  

For buyers, this change could mean reconsidering investment decisions, especially if relying on rental income to cover costs. Sellers with properties that appeal to investors may need to adjust pricing expectations or market to first-time buyers and families who are unaffected by this surcharge increase. 

2. Changes to First-Time Buyer Relief Expected in 2025

While no immediate changes were made, it’s anticipated that the first-time buyer Stamp Duty relief threshold will drop from £425,000 to £300,000 in April 2025. This will mean higher initial costs for first-time buyers, especially in more expensive regions. Currently, first-time buyer relief significantly supports younger buyers in affording property, but with this change, some may find it harder to enter the market in the future. 

Considerations for Buyers and Sellers 

If you’re a first-time buyer, planning to buy before 2025 could save you thousands in Stamp Duty costs. Sellers with properties in the lower to middle price range may also find a higher demand from first-time buyers over the next year, as buyers rush to benefit from the higher relief threshold. 

3. Support for Affordable and Green Housing Development

To address the ongoing housing crisis, the Budget has allocated increased funding for affordable housing and urban regeneration, including incentives for developing brownfield sites and energy-efficient homes. The government aims to streamline planning permissions to enable faster property development, particularly in underdeveloped areas. Green initiatives also include potential tax relief on eco-friendly construction materials, which could support the creation of more sustainable homes. 

Considerations for Buyers and Sellers 

For buyers, properties with energy-efficient features may become increasingly attractive, especially if future savings on energy bills are a priority. Sellers with energy-efficient or eco-friendly homes may benefit from the rising demand in this area, as these properties align with government incentives and buyers’ growing preference for sustainable living. 

4. Potential Capital Gains Tax (CGT) Changes for Sellers of Investment Properties

While CGT on primary homes remains unaffected, sellers of investment properties could face future increases in CGT rates. Currently, CGT on property is 18% for basic-rate taxpayers and 28% for higher-rate taxpayers. Speculation around aligning CGT rates with income tax could mean higher costs for property investors when selling in the future. This could motivate some investors to sell sooner to avoid potentially increased tax liabilities. 

Considerations for Buyers and Sellers 

Sellers holding investment properties might consider selling now to lock in the current CGT rates. For buyers, knowing that fewer investors may purchase rental properties due to tax implications could mean more opportunities in the market, especially for properties previously attractive to landlords. 

5. Increasing Housing Supply and Infrastructure Investment

To tackle the housing shortage, the government’s investment in infrastructure and housing supply, including affordable housing projects, aims to address demand at the lower end of the market. Local authorities will receive funding to build affordable homes, which could improve access to housing for those unable to buy at market rates. This is especially relevant in urban centres where affordable housing remains scarce. 

Considerations for Buyers and Sellers 

First-time buyers might find more affordable options in the future if they’re willing to look in areas targeted for these developments. Sellers in regions benefiting from new infrastructure or development projects may see a boost in property demand, as improved amenities typically attract more buyers. 

Conclusion 

The 2024 Autumn Budget presents a mixed bag for property buyers and sellers in. While some measures, like the increase in Stamp Duty for additional properties, aims to deter speculative buying, others focus on making housing more affordable and accessible. 

Buyers and sellers alike should consider the impact of these changes on their next steps, whether that means buying sooner to benefit from current thresholds or rethinking investment strategies. From Stamp Duty adjustments to housing supply and green incentives, the Budget changes mean careful planning will be essential for anyone navigating the property market. 

To stay informed and navigate these changes confidently, get in touch with New Oak Estates on 01246211646 or info@newoakestates.co.uk for expert advice tailored to your property goals. 

Whether you're buying your first home, considering an investment, or planning to sell,  we’re here to help you make the most of the current market. Contact us today to discuss your next move! 

In the meantime we've covered your common questions about the 2024 Autumn Budget. 

Frequently Asked Questions About the 2024 Autumn Budget for Buyers and Sellers 

How does the increased Stamp Duty surcharge affect property buyers? 

The Stamp Duty surcharge for additional properties has increased from 3% to 5%. This mainly affects those buying second homes or investment properties, making it more costly upfront and potentially impacting investment returns.? 

Will first-time buyers see any changes in Stamp Duty relief? 

The threshold for first-time buyer Stamp Duty relief remains the same for now, but it’s expected to decrease from £425,000 to £300,000 in April 2025. First-time buyers might want to act sooner to benefit from the current relief.? 

How does the Autumn Budget support affordable housing? 

The Budget allocates funds for affordable housing and urban regeneration. This includes incentives for brownfield development and streamlining planning permissions, aiming to increase the supply of affordable housing options.? 

Are there any expected changes to Capital Gains Tax (CGT) on property sales? 

While CGT rates remain the same for now, speculation about eventually aligning CGT with income tax rates could mean higher rates in the future for investment property sales. Investors may want to consider selling sooner to lock in the current rates.? 

Is council tax affected by the Autumn Budget? 

Not currently but council tax adjustments may come, especially for high-value properties and second homes, which could see increased rates. This is likely to affect areas popular with second-home buyers or vacation rentals? 

Paul Flitter MNAEA