The UK has been braced for a tough Autumn Budget to try and stabilise the significant challenges the country is currently facing. Chancellor Rachel Reeves has acknowledged a £22 billion gap in the nation’s finances and has today announced measures aimed at steadying the economy.
2024 has been a challenging but busy year for us, with a very active property market and mortgage rates finally falling. Demand for property along the Sussex coast has been high, especially in popular areas like Worthing and Hove, and even with the budget announcements, the market shows no signs of slowing down.
Here’s what you should know about the 2024 Autumn Budget:
Stamp Duty Increase
A key update in the budget is the stamp duty increase on second homes. Effective tomorrow (31 October 2024), the additional stamp duty rate for second-home buyers will rise from 3% to 5%.
This adjustment could slow the rental market, as fewer landlords may be inclined to purchase rental properties due to the higher rate.
Housing Supply
The government plans to build 1.5 million new homes over the next five years to tackle the ongoing housing crisis. Although, this will all depend on planning delays, finding suitable land, and attracting private investment due to public funding being limited. Rachel Reeves has committed £5 billion of investment to deliver her plans for housing next year.
Capital Gains Tax (CGT)
One of the changes to note is an increase in Capital Gains Tax (CGT) rates. CGT typically affects landlords and investors when they sell properties or assets that have increased in value. To help address the government’s budget gap, Reeves announced that the CGT on profits from selling shares will rise from up to 20% to up to 24%. However, rates on gains from property sales will remain the same.
Employers’ National Insurance and Minimum Wage
National Insurance contributions for businesses are rising by 1.2% and they will start paying it at £5,000 (rather than £9,100). There is also an increase in the National Living Wage by 6.7% to £12.21 an hour, which is worth up to £1,400 a year for a full-time worker.
This will lead to higher operational costs, and will particularly affect industries where staffing costs are a significant portion of overall expenses. Although this may not have a direct impact on most homeowners, it’s something to bear in mind if you’re a property investor that also operates businesses.
What’s next?
Landlords, property investors, and business owners should plan now to mitigate these changes. Whether it’s selling properties, adjusting portfolios, or reassessing tax strategies, early action can help reduce financial impact. Homebuyers will also need to take into consideration the increase in stamp duty.
This budget brings significant changes, and staying informed and preparing for the new regulations will be crucial. If you need advice on how these changes might affect you, get in touch with us for advice.
Jacobs Steel are estate and letting agents with offices in Worthing, Findon, Lancing, Shoreham-by-Sea and Hove. Our commercial sales & lettings team will guide you through the entire process, communicating with you every step of the way.
Disclaimer: While we aim to provide accurate information, this article is intended as a general guide and doesn’t constitute professional advice. Always consult with a qualified professional for specific guidance.