Written by Thomas Palmer MARLA – Head of Business Development at Watsons Property
2024 Autumn Budget: Key Impacts on the property market
The Autumn Budget, delivered by Britain’s first female Chancellor, Rachel Reeves, represents a significant milestone for Keir Starmer’s Labour Government. This marks the first Labour budget in over 14 years, with Reeves emphasising a commitment to ending “short-termism” in economic policy. Reeves plan includes raising taxes by £40 billion to support long-term economic growth.
The Chancellor outlined seven pillars forming the Government’s growth mission: economic and fiscal stability; investment, infrastructure, and planning; regional growth; employment opportunities and skills development; an industrial strategy and trade focus; fostering innovation; and meeting net-zero targets.
At Watsons, we take immense pride in our heritage as Chartered Surveyors. Since our establishment in 1890, we have built a reputation for excellence, innovation, and integrity. As market leaders in property and surveying, we understand how budgetary changes can influence critical decisions about buying or selling homes, whether for personal use or investment purposes. Here, we explore the budget’s impact on the housing market.
Stamp Duty Land Tax
Effective immediately, the Stamp Duty Land Tax rate on second home purchases has increased from 2% to 5%. While it is early to predict the market’s response, it is possible that some landlords may reconsider investing, deterred by these higher taxes. Consequently, this could lead to continued rent increases, given the already constrained stock levels in the private rental sector. Despite rumors, there were no changes to Stamp Duty thresholds for first-time buyers, providing some relief for those entering the property market.
Capital Gains Tax
Capital Gains Tax, the tax levied on profits from the sale of certain assets, will also see changes. The lower rate is set to rise from 10% to 18%, while the higher rate will increase from 20% to 24%. However, CGT rates on residential properties remain unchanged.
Inheritance Tax
The Chancellor announced an extension of the current Inheritance Tax thresholds until 2030. The basic threshold of £325,000 remains, rising to £500,000 if the estate includes a residence passed to direct descendants, and up to £1,000,000 when combined with a spouse or civil partner’s tax-free allowance.
Housing Supply Initiatives
Acknowledging the chronic housing shortage, the Chancellor unveiled over £5 billion in government investment to advance housing initiatives in the coming year. Furthermore, £3 billion in loan guarantees will be allocated to support small housebuilders. The Affordable Homes Programme will receive an increase to £3.1 billion, aiding in the construction of thousands of new homes across the UK.
Warm Home Plan
To improve energy efficiency across the UK, the government is rolling out the Warm Homes Plan, dedicating £3.4 billion over the next three years. This substantial investment aims to upgrade the energy performance of 350,000 homes, focusing on insulation, heating, and energy-efficient technologies. By addressing energy loss and reducing heating costs, the initiative supports lower energy bills for residents, reduces emissions, and contributes to the UK’s long-term climate goals. The upgrades are expected to benefit communities and enhance the overall quality and comfort of homes across the country.
Ray Smith, Senior Partner and Surveyor at Watsons, notes: “The markets have reacted positively to the Autumn Budget, and we welcome the renewed focus on long-term stability.”
These budget measures are designed to drive sustainable economic growth, support housing supply, and encourage energy efficiency in the property sector. At Watsons, we are committed to guiding our clients through these changes with expert insights and tailored advice. As the market evolves, our focus remains on helping you make informed decisions, whether you are buying, selling, or investing.
To find out more visit https://www.gov.uk/government/publications/autumn-budget-2024
Contact Our Team
If you wish to discuss our lettings services, please contact our team at 0333 220 1234 or email: lettings@watsons-property.co.uk. Find out more about our Lettings services here.
