Budget 2024: what this means for you

The 2024 UK Budget brings several key changes that will impact homeowners, aspiring buyers, and the wider housing market. These changes aim to address the affordability crisis and boost the housing sector in the long run. Here’s a detailed breakdown of the key measures and their potential effects on you.

1. Investment in Affordable Housing

The government has committed an additional £500 million to building 5,000 new affordable homes, part of a broader £1.5 billion effort to create 1.5 million homes over the next four years. This ambitious target seeks to alleviate the housing shortage and provide more affordable options for those struggling to get on the property ladder. While these efforts are promising, the challenge remains to ensure that these homes are truly affordable in the face of rising demand.

2. Stamp Duty Surcharge Increases

Investors and second-home buyers will see a rise in the stamp duty surcharge, which will increase from 3% to 5% starting October 31, 2024. This change is designed to prioritise homeownership for those buying homes to live in rather than as investments. The government hopes this will make it easier for first-time buyers to compete in the housing market by reducing the number of speculative purchases.

3. Right to Buy Reforms

Local councils will now retain 100% of the proceeds from Right to Buy sales, up from 50%. However, the discounts available to new applicants will be significantly reduced, making it harder for tenants to purchase their homes. This reform is part of a broader strategy to reduce public spending on housing and encourage local authorities to reinvest in new homes.

4. Inheritance Tax and Capital Gains Adjustments

The inheritance tax threshold will remain frozen until 2030, which could affect those planning to pass their properties to the next generation. Additionally, there will be an increase in capital gains tax rates for business owners, employers, and shareholders. These changes are part of an effort to increase government revenue but may add further complexity to property and estate management.

5. First-Time Buyer Stamp Duty Relief

While stamp duty relief for first-time buyers was raised to £425,000 in 2022, this figure will return to £300,000 by 2025. The upcoming reduction in the stamp duty threshold will make it more challenging for first-time buyers to afford their first home.

6. Impact of Rising Mortgage Rates and Market Volatility

The broader economic context of the 2024 Budget also includes concerns about rising mortgage rates and inflation, which have made it more difficult for many buyers to enter the market. Despite the government’s efforts to support homeownership, higher mortgage rates continue to pose a significant barrier to affordability. As interest rates remain high, housing affordability could become a growing issue, particularly for those who were hoping to take advantage of the stamp duty relief.

Aiming for a Fairer Housing Market

This year’s Budget focuses on creating a fairer housing market, where those who need homes to live in can access them at a reasonable price. While the increased investment in affordable housing and changes to stamp duty may help first-time buyers and families, the continued pressure on mortgage rates and changes to tax relief may make it harder for some to succeed in the current environment. Balancing these competing demands will be key in ensuring long-term housing stability.

In Conclusion

The 2024 UK Budget presents a mix of opportunities and challenges for homeowners and potential buyers. While the government’s commitment to affordable housing and the increase in stamp duty surcharge aim to address market imbalances, rising mortgage rates and changes to tax relief could make it harder for some buyers to enter the market. Navigating these shifts will require careful consideration, whether you are looking to buy your first home, invest in property, or plan for future generations. Staying informed and prepared will be key to making the most of the evolving housing landscape in the months ahead.

If you’re navigating these changes and need expert guidance in buying, selling, or investing in property, Asif Kola Realty, your local bespoke estate agent is here to help.

With a deep understanding of the market and a commitment to delivering tailored solutions, we ensure you’re equipped to make informed decisions.

Get in touch with us today to explore how we can assist with your property journey.