It was billed as one of the most important Budgets for years, and one which would set the economic agenda for years to come. So, what does Labour Chancellor of the Exchequer Rachel Reeves’ financial statement to the House of Commons mean for the housing sector?
Maunder Taylor provide residential property management services in Barnet, across north London and into Hertfordshire. Here we look at the key points from her statement to the House of Commons last week.
Stamp Duty
The stamp duty surcharge paid on second home purchases in England and Northern Ireland, will rise from 3% to 5%. This took effect the day after the Chancellor’s statement. However, the tax rates on profits from selling additional properties will remain unchanged.
The threshold at which house buyers start paying stamp duty on their main home will drop from £250,000 to £125,000 in April 2025, reversing a previous tax cut brought in during Liz Truss and Kwasi Kwarteng’s mini-Budget in September 2022.
Social Housing
Social housing providers will be allowed to increase rents above inflation as part of a multi-year settlement. However, discounts for social housing tenants who are buying their property under the Right to Buy scheme will be reduced.
The Affordable Homes Budget
The current Affordable Homes Budget has been boosted by a further £500million. The intention is that this will mean up to 5,000 new properties coming onto the market. (The AHB, which runs until 2026 and already aimed to deliver 180,000 new homes, promotes shared ownership and affordable rents).
What Will It Mean?
Reaction to the measures – particularly the rise in stamp duty surcharge – has been mixed. The Treasury said that the increase would give first-time buyers and those looking to move an advantage over second-home buyers and landlords, resulting in 130,000 additional sales (or moves) by these groups over the next five years.
This view was echoed by Ben Twomey, chief executive of campaign group Generation Rent, who said: “The higher costs for investors will make it easier for first-time buyers to compete in the house sales market”.
However, Paul Johnson of the Institute for Fiscal Studies think tank predicted that renters would “pay part of the cost” of the 2% increase as the supply of rented accommodation would fall.
Ben Beadle, chief executive of the National Residential Landlords Association, added: “What tenants needed was a Budget to boost the supply of new, high-quality rental housing. What we got is a recipe for less choice and higher rents”.
Britain’s biggest lender, the Nationwide Building Society, predicted that there would be a rise in home sales in the early part of next year as would-be buyers – particularly first-timers – would be trying to complete before the stamp duty thresholds were lowered.
However, Nationwide’s chief economist Robert Gardner said this increase would not be as great as in previous years (when the stamp duty thresholds were also changed), as relatively high interest rates were continuing to act as a dampener on the market.
Maunder Taylor – an Independent Estate Agency in Whetstone
Maunder Taylor offer a wide range of property (and legal) services. These include lease renewals advice, property valuation surveys and residential property management in Barnet, Potters Bar, Totteridge, and other parts of north London and Hertfordshire. Our head office is in Whetstone.
For more information follow this link and fill in the online form, or call us on either 020 8446 0011, or 01707 665 666 (the latter number is for residential block management enquiries only).