Labour’s 2024 Autumn Budget Announcement is set to Significantly Impact Renters and Homebuyers throughout the UK
As families work out today what yesterday budget actually means for them Jonathan Bone, Head of Mortgages at online mortgage broker Better.co.uk, shared insights on the new measures introduced and their potential effects on the property market:
Stamp Duty adjustments
“Ahead of the announcement, there was widespread concern that the Chancellor would remove the 0% stamp duty threshold for first-time buyers. However, the Chancellor is committed to supporting first-time buyers and only announced increasing the amount of tax paid when buying a second home.
“This means anyone buying an additional property, whether as an investment or a second home, will pay 5% in stamp duty for properties up to £250,000, an increase from the previous 3%.
“The government is keeping the current stamp duty relief for first-time buyers, allowing them to avoid paying tax on homes priced up to £425,000, although this relief will lower to £300,000 next year.
“For first-time buyers, the rise in taxes for second homes and investment properties might reduce competition from investors, which could help ease property prices. This, in turn, should make it slightly easier for first-time buyers to find a more affordable home.
“Continued stamp duty support should also make it easier for first-time buyers to enter the housing market.”
Reduced right-to-buy discounts
“The government has also committed to reducing discounts on the right-to-buy scheme, which allows social housing tenants to buy their rented homes at a lower price. By lowering these discounts, the government hopes to stimulate housing growth in a bid to increase the supply of affordable housing.
“This decision is to help local councils and social housing providers keep the money from right-to-buy sales, so they can use it to create more affordable homes and increase the overall supply of housing, making it easier for people to find affordable and safe homes.
“This should mean more availability in the long term for those needing affordable rental options or first-time buyers, although it may become harder for current social housing tenants to buy their rented properties at a reduced rate.”
Lifetime ISA unchanged
“Labour was expected to introduce adjustments to the Lifetime ISA (Individual Savings Account), however, the current structure was left unchanged, with no alterations to contribution limits, withdrawal penalties, or eligibility rules.
“This means that first-time buyers can continue to benefit from the scheme, where they can still save up to £4,000 a year, with a 25% government bonus on contributions, making it a helpful way to save for a mortgage deposit.
“For anyone saving towards a deposit, the Lifetime ISA remains one of the main options that offers a guaranteed bonus from the government, helping buyers grow their savings faster. This continuity in the scheme provides stability for homebuyers to reach their deposit goals, especially amid high property prices.”
Capital gains tax (CGT) hiked
“It was expected that there would be changes to the Capital Gains Tax (CGT) within the Autumn Budget, with key speculation around Labour increasing CGT rates to match income tax rates, meaning higher taxes on profits from selling assets.
“Yesterday’s announcement confirmed this belief, with Chancellor Rachel Reeves hiking the higher rate of CGT to 24% from 20%, while the lower rate has risen to from 10% to 18%.
“While this announcement won’t directly impact everyday homeowners, people looking for investment properties or those hoping for lower property prices might feel some indirect effects.
“It’s worth keeping a close eye on how these tax changes affect the property market in the coming months.”
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