Chancellor Rachel Reeves’ Autumn Budget 2024 brought a wave of reactions across the property market. For homebuyers and homesellers, the changes mean adjusting to new financial realities. Here’s an engaging dive into what the Budget has in store.

1. Stamp Duty Surge for Second Homes: The Sting for Additional Property Buyers

Second-home buyers and property investors were hit with an unexpected twist—effective from October 31, 2024, the Stamp Duty Land Tax (SDLT) surcharge on additional properties jumped from 3% to 5%. What does this mean for those buying a second property valued at, say, £293,000? The stamp duty bill now climbs by over £5,500. This change could dampen enthusiasm for second-home investments and may prompt prospective buyers to rethink their strategies.

2. Looming Changes for First-Time Buyers and Home Movers: A Countdown Begins

Stamp duty relief, introduced to ease the financial entry for first-time buyers and boost activity for home movers, is coming to an end. Set to expire on March 31, 2025, this relief will be replaced with less favorable thresholds. Starting April 1, 2025:

• The stamp duty threshold for home movers will revert from £250,000 to £125,000.
• First-time buyers will see their threshold decrease from £425,000 to £300,000.

For many, this shift will mean higher upfront costs when buying a home, a crucial factor for buyers to consider as they plan their purchases.

3. Mortgage Rates: A Hurdle for Affordability

The Budget’s fiscal policies, including increased borrowing and spending, have left their mark on financial markets. The outlook for mortgage rates remains elevated, making affordability a concern for first-time buyers and those nearing a remortgage. With rates expected to stay higher for the foreseeable future, the pressure on monthly repayments and housing budgets continues. This puts homeownership a step further out of reach for many and may slow down market activity.

Final Thoughts

The Autumn Budget 2024 paints a complex picture for homebuyers and homesellers. While measures like the increased stamp duty surcharge on additional properties aim to level the playing field for first-time buyers, they could also have a ripple effect on market dynamics. The upcoming changes to stamp duty thresholds in 2025 will add urgency for buyers to act sooner rather than later. Coupled with high mortgage rates, these shifts create a challenging environment that buyers and sellers will need to navigate with care.

For homebuyers looking to make their move and sellers gauging the best time to list, staying informed and planning ahead is more important than ever.

Contact us today to arrange a confidential chat if you are thinking about selling or buying before the changes come into place in 2025.