The Autumn Budget – What is the potential impact for the residential property market?

By Justine Simms

Senior Associate Solicitor

15 October 2024

Article Insights

Later this month, Chancellor Rachel Reeves will deliver Labour’s first Autumn Budget since winning the general election in July. Although it’s unclear what she will announce, the Chancellor previously warned that ‘difficult decisions’ are necessary to ‘restore economic stability’ in the UK. Prime Minister Sir Keir Starmer also warned of a ‘painful’ Autumn Budget, as the government seeks to address the ‘£22bn black hole’ in the nation’s finances.

So, what does this mean for you?

First Time Buyers

First-time buyers currently benefit from a higher SDLT threshold.

The threshold for when a first time buyer pays SDLT was temporarily raised to £425,000 in 2022 by the then Chancellor, Kwasi Kwarteng.

For a first time buyer there is currently no SDLT payable on properties costing up to £425,000 and for properties between £425,000 and £625,000, SDLT is only payable on the amount above £425,000. If the property costs more than £625,000, it no longer qualifies for first-time buyers’ relief.

If there are no changes announced in the Autumn Budget at the end of the month, then this will fall back to its usual level of £300,000 in March 2025, but the Chancellor may address this due to concerns about housing affordability in the UK.

Second-Time Buyers

Second time buyers also currently benefit from a higher SDLT threshold.

The Threshold for when a second time buyer pays SDLT was temporarily raised to £250,000 for all purchases in 2022 by the then Chancellor Kwasi Kwarteng.

For second time buyers there is currently no SDLT payable on properties costing up to £250,000.

If there are no changes announced in the Autumn Budget at the end of the month, then this will fall back to its usual level of £125,000 for all purchases in March 2025.

Landlords

Landlords already face higher SDLT rates compared to those purchasing primary residences with an additional 3% surcharge on second homes or buy-to-let properties.

There is some speculation that the Chancellor may maintain or increase SDLT thresholds, in order stimulate the market by making housing more affordable.

Changes to CGT may also have an impact on SDLT thresholds. An increase in CGT could result in fewer properties being put on the market, as second time owners or landlords may be less inclined to sell, which in turn could drive up house prices to meet demand. To counter this, the Chancellor may consider maintaining or extending SDLT reliefs.

Any changes to SDLT in the Autumn Budget could affect landlords, such as rate adjustments, new thresholds, or reliefs. For example, a reduction in the additional SDLT rate could encourage more buy-to-let investment.

Interest rates will also play a part. With lower interest rates having a positive impact on the housing market, the Chancellor will want to maintain stability in the economy, but will hopefully want to ensure interest rates stay low or get lower.

The Chancellor will be aware that any further SDLT rises could adversely impact the housing market and with generous reliefs already in place for first time buyers it will be interesting to see if she gives them any further support. We can only watch and see.

If you would like to discuss a the points highlighted above, or need support with your property, our Residential Property team can help. Please contact us by filling in our contact form.

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Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.