The highlight of the most recent UK property news headlines was, of course, the historic Autumn Budget by the country’s first female Chancellor of the Exchequer.
Let’s take a brief look at the main points from the Budget likely to affect the housing market, together with other leading stories of the month.
Property and the Autumn Budget
The principal decisions affecting both homeowners and landlords are:
Personal tax thresholds
- a freeze on the current personal tax thresholds for Capital Gains Tax (CGT) and Inheritance Tax (IHT) until the 5th of April 2030;
SDLT
- the Stamp Duty Land Tax (SDLT) surcharge on the purchase of second properties (holiday homes and buy to let rented accommodation, for example) is increased from the current 2% to 5% with immediate effect;
Right to Buy
- the discounts previously available under the retained Right to Buy scheme for the purchase of a tenant’s council home have been slashed in value;
New homes
- housing policies are a feature of the new government, and the Chancellor has promised investments of more than £5 billion for the building of new homes;
- in addition, a further £3.1 billion is directed towards the Affordable Homes Programme, some £3 billion to help guarantee an increase in the building of new homes, and support for small housebuilders.
UK property sales hit a high
Against a background of more favourable mortgage interest rates and a brighter economic outlook, property sales are enjoying a surge in activity last seen four years ago, reported the Buy Association recently.
In October, sales were 25% up on the same month last year while the demand from house hunters also rose by 23%.
The supply of new properties is also up – by 13% – over the same months last year, reflecting an 11% increase in the volume of homes for sale. That increase in supply has helped to hold the inflation in house prices to just 1%.
Zoopla House Price Index: October 2024
The listings website Zoopla, on the 28th of October, echoed many of Rightmove’s findings, namely:
- thanks to a boom in sales activity (the highest in four years), sales in the pipeline are currently 30% higher than this time last year and are worth an estimated £113 billion;
- an increased supply of homes for sale and the affordability issues faced by some prospective buyers puts a brake on the inflation of house prices – currently holding at around 1%;
- because rents have been rising and mortgage interest rates falling, encouragement has been given to first-time buyers over renters – with the former now responsible for 36% of all sales;
- nevertheless, the Budget’s changes to Stamp Duty charges mean that 20% more of first-time buyers will be paying the tax.
As Zoopla says, it is turning into a “bumper year” for sales in the housing market. Incomes have risen. The competition among mortgage providers has resulted in lower rates of borrowing, driving forward the biggest upsurge in sales since the end of Covid restrictions.
Rightmove: 5 reasons it’s a buyers’ housing market
In an article on the 21st of October, the online listings website Rightmove advanced five reasons why there is currently a buyers’ housing market:
- while house prices have gone up, prices have grown more slowly than average in October compared to what is expected this time of year;
- asking prices have had to be more competitively pitched;
- there are some 12% more properties currently on the market than a year ago;
- sellers are finding it takes longer to sell a home (the national average time for homes to sell is currently 61 days); and
- some prospective buyers continue to face affordability issues.
