Market Update

I have lost count of the number of times that I have been asked how the market is over the last few months. This question probably rises from the political changes that we have seen in the UK and the recent budget that has certainly raised some eyebrows.  The full breakdown of the budget is available online Autumn Budget 2024 – GOV.UK but some key highlights for the property market are as follows:-

– Stamp Duty Surcharge on second homes.
The stamp duty land tax (SDLT) on second homes has increased from 3% to 5% with effect from 31.10.2024.This is likely to be a source of frustration to investment landlords in the private rented sector. Over the last few years, we have seen a shortage in good quality rental properties, and this could pressure the market further.

From April 2025 there will be a rollback of SDLT thresholds and tax will apply to residential property with a value from £125,000.

– Capital Gains Tax (CGT) and Inheritance Tax (IHT)
The IHT threshold has been frozen until 2030.There are significant alterations to the treatment of inherited assets including how pensions, agricultural property, and business interests are handled in a deceased’s estate. Some of these changes are significant to our clients. Richard Furnival from our Professional department delves further into this here

Whilst the changes to CGT were not as bad as expected, the chancellor confirmed an increase in the rate paid by basic-rate taxpayers from 10% to 18% and from 20% to 24% for higher-rate taxpayers. These changes are effective immediately and align the CGT rates with those on sales of residential property. The current annual capital gains allowance was also left unchanged at £3,000 per person.

– Right to buy and affordable housing
There will be a reduction on Right to Buy discounts and local authorities will be allowed to retain social housing sale proceeds for reinvestment.

– Businesses will be affected.
National insurance contributions from the employer will increase and the contribution threshold will be lowered. National minimum wage rises will take effect and business rate relief will be lowered. All of this means that costs to businesses will rise.

We can see that the budget will affect a number of our clients across the market, from residential landlords through to our agricultural clients and business owners.  Getting the right advice is now more critical than ever as well as careful financial planning. Having an agent that can understand the market and niche sectors of this will help you achieve your goals.

In the run up to the budget we saw the interest in properties steady a little and we anticipate that, whilst we have a good number of good buyers in the market at the minute and some good properties coming to market, it may take some time for the market and people to adjust to the outcomes of the budget.  We will keep you up to date on market activity and the impact of these changes.  Our valuers and Surveyors are on hand to support and assist where we can.