Well, the Autumn Budget 2024 which took place on Wednesday 30^th October has been one of a few firsts. It was the first from a Labour chancellor for fourteen years. It was also the first ever budget from a female chancellor in history. But what does it deliver for the property market, for landlords, home buyers, first-time buyers, for example? We take a look…

Stamp duty increases on second homes 

By far the biggest news for the property market is that there will be an increase of 2% in the stamp duty surcharge for those buying second homes. Be that buy-to let properties, holiday homes or company purchases, the increase starts with immediate effect, from 31^st October 2024. This increase will see the stamp duty surcharge for second homes increase from 3% to 5%.

Below is a breakdown of the new stamp duty rates for investment properties and second homes:

Below is a breakdown of the new stamp duty rates for investment properties and second homes:
Property Value                         SDLT Rate
Up to £250,000                         5%
£250,001 – £925,000                10%
£925,000 – £1.5 million             15%
Over £1.5 million                       17%

No continuation of the stamp duty relief   

There were no announcements in the Autumn Budget 2024 confirming an extension to the current reduced standard SDLT thresholds. The Conservative government had introduced stamp duty relief in 2022, including for first-time buyers, until March 2025. Now with no confirmation of any extension to the relief, we can expect standard stamp duty rates to revert back to their original thresholds. So, the rate at which no stamp duty will be charged for home buyers, will return to £125,000 from the current £250,000 threshold.

The variations in the rate of standard stamp duty by region across the country will remain.

Change to stamp duty relief for first-time buyers  

Looking at first-time buyers specifically, the reduction in the first-time buyers stamp duty relief means they’ll face a significant extra cost when buying a first home. Under the current thresholds, the rate at which first-time buyers don’t pay stamp duty tax on a property is £425,000 or below. They then pay only 5% on the portion between £425,001 and £625,000, for a home priced at or below £625,000.

After the budget and in April 2025, first-time buyers can expect the threshold at which they pay stamp duty to fall back to £300,000. And the total price of the property they purchase cannot be more than £500,000.

No capital gains tax hikes for landlords

Yes, it was confirmed in the Autumn Budget 2024 that capital gains tax on residential property will remain the same. The residential property rates will stay at the lower rate of 18% and the higher rate of 24%, so no change there.

No news on the Mortgage Guarantee Scheme

We had expected some news around the continuation of the Mortgage Guarantee Scheme. However, there wasn’t anything concrete confirmed in the budget. The Chancellor instead said that she’ll decide whether or not the Mortgage Guarantee Scheme can be made permanent in its current form, following consultation with industry. The current scheme is open to new 95% mortgages until 30 June 2025.

How do we expect these changes to impact the property market?

Firstly, for landlords and property investors who are looking to build portfolios, these changes will heavily influence their buying decisions in the immediate future. The stamp duty increases will impact the affordability of buy-to-let purchases, especially those in the immediate pipeline. And in an already difficult market, this will have a further negative impact on the private rental sector.

Secondly, for home movers with plans to buy in 2025, we may well see plans brought forward or decisions made to not move at all. With the end of the standard stamp duty relief due to come in at the end of March 2025, there could be a big rush to buy before the charges increase.

As local independent estate agents, we are here to help you with property matters. Whether you’re unsure when’s the right time to sell your home or if you were looking to build a buy-to-let portfolio and feel hesitant with changes following the Autumn Budget 2024. Contact us to discuss your circumstances and get the advice you need. Give us a call today on 0161 941 4445 or email us here.