Autumn Budget for Landlords Buyers & Sellers

What will the Autumn Budget’s Impact be on You?

With the Autumn Budget now done and dusted, the big question everyone has been asking is ‘How will it affect me?’ In the context of the property market there are several impacts, affecting buyers, sellers and landlords alike.

Budget Impact on landlords

For landlords and the lettings market in general, a key area of concern revealed in the budget was the hike in stamp duty. That will add extra strain to a sector already under intense pressure.  This is on the back of increased responsibilities faced by landlords as a result of the Renters’ Rights Bill, which is currently being debated in the Commons.

The stamp duty rise on buy-to-let purchases, which increased from 3% to 5% the day after the Budget announcement, came as a shock and could deter some landlords from expanding their portfolios since it will cost them more to do so. That could further restrict supply in an already overstretched market.

While additional supply shortages will push up rental prices landlords who still choose to expand their portfolios may look to increase rents to recover some of their additional costs faced through the rise in stamp duty. Either way affordability will be tested for tenants who are already finding it hard to secure properties due to competition in the market.

Budget Impact on buyers and sellers

 Buyers and sellers will also be impacted by stamp duty rises. Second-home buyers face the same 2% hike in stamp duty as buy-to-let- buyers, while standard buyers will be affected by new thresholds due to come into force next year.

These weren’t specifically mentioned in the Autumn Budget but in September 2022 stamp duty thresholds were frozen and are due to expire at the end of March 2025. Since there was no mention of an extension this means that the point at which stamp duty is due will kick in at a lower rate than before and so add further cost to buying prices. It will become due from £125,000 rather than £250,000 from April to residential purchases and from £300,000 rather than £425,000 for first-time buyers.

Although first-time buyers will face increased stamp duty expenses, the government also used the budget to announce plans to make its mortgage guarantee scheme – supporting mortgages of 95% – a permanent feature. Further details are due in late spring following consultation with the industry.

Longer-term Labour also announced additional investment in affordable homes with a further £500 million to be added to its Affordable Homes Programme budget to kickstart what it says will be the biggest increase in social and affordable housebuilding in a generation. Meanwhile, affordability will also improve – albeit marginally – through benefit changes and increases to the National Living Wage announced in the Budget which should give consumers additional money in their pockets.

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