Key takeaways
Additional property Stamp Duty increases from 3% to 5% from October 31st, 2024
First-time buyer Stamp Duty relief (£425,000) continues until April 2025, then reduces to £300,000
Standard Stamp Duty threshold stays at £250,000 until April 2025, then drops to £125,000
£500 million allocated for affordable housing as part of £5 billion housing package
Right to Buy discounts reduced with councils retaining all sale proceeds for new housing
For the first time in 14 years, Labour delivered a Budget. Rachel Reeves, the chancellor, stated that they must make difficult choices to fix the foundations of the UK economy.
Amongst raising taxes by £40 billion, changes to employers’ tax, Capital Gains Tax, and closing inheritance tax loopholes, there were some changes that will impact the housing market.
Here’s a breakdown of everything you need to know.
Heads up – buying a second home is about to cost more.
From 31st October 2024, the extra Stamp Duty for purchasing an additional home is going to increase by 2%.
This means that if you are buying a second property, whether it’s a buy-to-let or a second home, you’re going to have to pay more.
Here’s a breakdown of how much extra Stamp Duty you’ll pay on an additional property:
These updates are likely to unsettle property investors, in a market where plenty of landlords are already selling homes that were previously rented out.
With this tax increase, it gives first-time buyers and those looking to move house an advantage over second-home buyers and landlords. It is anticipated to result in 130,00 additional transactions by these groups in the next 5 years.
However, the hike in taxes may also mean that fewer properties are on the market for renters or that they may even face higher monthly payments.
The race is on for first-time buyers - you won't pay any Stamp Duty on homes up to £425,000 until April 2025. If your home costs between £425,000 and £625,000, you'll only pay 5% on that portion. For properties over £625,000, the standard rates kick in.
Check out our first-time buyers guide for more.
What about home movers? Until April 2025, you won't pay stamp duty on properties up to £250,000. After that:
Changes are coming in April 2025:
A £5 billion housing package is set to deliver £33,000 new homes across the country, with £500 million specifically earmarked for affordable housing. This will help boost the housing supply and give smaller builders more opportunities to develop.
The investment includes tackling river pollution that's currently preventing 28,000 new homes from being built, funding for 3,000 energy-efficient properties across the country, and £56 million to create 2,000 new homes at Liverpool Central Docks.
To protect council housing stock, Right to Buy discounts are being reduced. Local councils will now keep all the money from these sales, meaning they can reinvest it straight back into building new homes.
This change addresses a long-standing issue where the Right to Buy scheme was reducing social housing availability and discouraging councils from building new homes.