The Labour government delivered their first budget in fourteen years at the end of October. It was also a budget from a woman for the first time in history. With a huge shortage of properties in the country, and affordability being a major issue, we were all waiting with interest to find out what was in store for new home buyers. Will there be any further help for first-time buyers? What are the plans for housebuilding? We share the key points from the Autumn Budget 2024, below.
Stamp duty relief set to end
Back in 2022, the standard stamp duty thresholds were reduced by the former Conservative government. This stamp duty relief is set to end in March 2025. And Rachel Reeves confirmed in the Autumn Budget that the thresholds will return back to their previous levels from this date. That means the rate at which stamp duty land tax will be charged, will return to £125,000 in England.
So, from April 2025, the stamp duty thresholds will be:
Property Value SDLT Rate
Up to £125,000 Zero
£125,001 - £250,000 2%
£250,001 - £925,000 5%
£925,001 - £1.5 million 10%
First-time buyers’ stamp duty relief to decrease
First-time buyers will be less better off when buying a new-build home as of April 2025. While the standard stamp duty rates will return to their original thresholds, the same will also happen to the current rate of first-time buyer relief. Currently, first-time buyers benefit from reduced stamp duty land tax rates on properties priced at £625,000 or less. They pay no stamp duty on the first £425,000 and then 5% on any remainder up to the £625,000 value.
But come April 2025, the property limit to be eligible for first-time buyer stamp duty relief will reduce to £500,000. And first-time buyers will only get the first £300,000 of the value of the property free of any stamp duty, with 5% paid on any remainder up to £500,000.
Of all the new-home buyers, first-time buyers will be the hardest hit with this change, with their relief rates reducing the most dramatically.
Stamp duty increases on second homes
Probably one of the biggest headlines from the Autumn Budget 2024 was the announcement of an increase in the stamp duty on second homes. And the change was made with immediate effect, from 31st October 2024. Chancellor Rachel Reeves confirmed an increase of 2% in the stamp duty surcharge for those buying second homes be they buy-to-let, investment properties or holiday homes. The increase sees stamp duty on second homes increasing from an initial 3% to 5%.
Reeves says this change will support more first-time buyer and home mover transactions over the next five years, with more properties being available to buy.
New-build homes have grown in popularity with property investors in recent months thanks to their energy efficiency, the financial incentives on offer, and the warranties available. But will this stamp duty hike affect their decisions to continue to buy new-build homes? It might affect some investors’ expansions plans, but by buying new, investors may well save in other areas, making the purchase more lucrative.
Waiting for news on the Mortgage Guarantee Scheme
The Mortgage Guarantee Scheme, a UK-wide government scheme which helps lenders offer 95% mortgages to both first-time buyers and existing homeowners looking to buy a home, is due to run until 30 June 2025. The scheme had been mentioned in the Labour government’s pre-election campaign, as something they wanted to rollout permanently. And there was expectation for this to be confirmed in the Autumn Budget. However, nothing concrete was confirmed. Instead, the Chancellor said that she’ll make further decisions on the Mortgage Guarantee Scheme in its current form, following consultation with industry.
Getting housebuilding moving
A handful of measures were confirmed in the Autumn Budget 2024 to get housebuilding moving and the government closer to their £1.5 million new homes target.
One of the measures includes £3 billion additional support by way of housing guarantee schemes for SME housebuilders, and the Build to Rent sector.
There will also be £47m in support to get the 28,000 new homes that are currently in limbo due to nutrient neutrality rules, moving.
And there’s to be help with the lack of resources with planning, which causes many delays with housebuilding in this country. The government has confirmed £46m in additional funding for local planning authorities. This will go towards the recruitment and training of 300 graduates and apprentices, as well as accelerating large sites that have become stuck in the system.
Affordable housing to take precedence
With regards housebuilding, the biggest focus in the Autumn Budget was on unlocking affordable housing. The Chancellor confirmed a top-up of £500 million in new funding for the Affordable Homes Programme, to build up to 5,000 additional, new, affordable social homes. This comes ahead of the government’s Housing Strategy, which is due in Spring 2025.
Another £25m has been earmarked for a public-private joint venture to build 3,000 low carbon energy-efficient homes across the country, of which 100% will be targeted for affordable tenures.
Home buyers! Did you know you can easily search for new-build houses and apartments using our handy search tool. Simply type in where in the country you hope to live, and we will deliver all the new homes nearby. Get started here.
