What the Autumn Property Budget means for you

The Autumn 2024 Budget has brought a blend of promising news and a few new considerations for those thinking about buying or selling a home. With changes in property taxes, a commitment to new housing projects, and some adjustments aimed at helping households with the cost of living, there’s a lot to unpack. Let’s explore what these updates mean for regular people navigating the property market here in Hampshire.

Stamp Duty Changes: Good News for Main Home Buyers

One of the main takeaways from the budget is the government’s decision to raise the Higher Rates for Additional Dwellings (HRAD) in Stamp Duty Land Tax (SDLT) from 3% to 5%. This change affects those buying second homes or investment properties, not those purchasing their primary residence. For Hampshire homebuyers focused on finding a main home, this is a win. The additional costs now rest more heavily on buy-to-let investors, reducing competition for first-time buyers or those moving up the property ladder. This is particularly beneficial in areas like Hampshire, where a significant number of people purchase homes to live in rather than invest.

According to the Office for Budget Responsibility (OBR), this shift could mean steadier home prices for main residential buyers, as investor competition lightens up. For first-time buyers, this can create a friendlier market, though rising interest rates may still weigh on affordability.

Boosting Housing Supply: New Projects on the Horizon

The budget outlines a bold commitment to build 1.5 million new homes by 2030, a move aimed at increasing the housing supply to keep up with demand. The additional investment should help push forward new development projects, particularly in areas with high growth potential like Hampshire. Local councils are expected to receive more support to ensure planning permissions are granted swiftly and that projects can break ground sooner.

For sellers, this influx of new homes could influence the local market, as more properties become available. However, this is a long-term plan, meaning the effects will be gradual. If you’re a buyer, this news is a step in the right direction for stabilising property prices over time. Construction News points out that the success of this commitment depends on managing rising construction costs and overcoming any labour shortages, factors that have delayed projects in the past.

Cost of Living Support: Easing Household Pressures

Recognising the ongoing pressure on household budgets, the budget includes measures to support everyday expenses. An increase in the National Living Wage, alongside continued support through the Household Support Fund, provides a cushion for those on lower incomes. Additionally, fuel duty remains frozen for another year, which is helpful for commuters and those reliant on personal transport—especially in more rural parts of Hampshire.

These provisions don’t directly change the property market, but they do play a role in stabilising household finances, making it easier for people to save for deposits or manage their mortgage repayments. As reported by the BBC, these measures are part of the government’s broader strategy to shield working families from economic challenges, helping households maintain financial stability, which is crucial for anyone considering a major purchase like a home.

Interest Rates and Mortgage Planning: A Mixed Outlook

Although the budget doesn’t directly set interest rates, the policies within it can influence economic conditions. The OBR forecasts modest economic growth, which could lead to gradual interest rate stabilisation after recent increases. For potential homebuyers, this could mean slightly better mortgage rates in the medium term.

The recent rate hikes have impacted affordability, so a potential easing on rates might offer some relief to new buyers and those looking to remortgage. However, for the moment, it’s wise to plan for rates to remain somewhat elevated, so securing a fixed-rate mortgage could provide peace of mind for buyers who want stability in their payments.

Business Rate Relief and Local Economy Support

The budget extends relief on business rates for small businesses and the high street, with targeted support for retail, hospitality, and leisure sectors. For Hampshire communities, this support helps maintain local shops and services that add to the area’s desirability. If you’re a homeowner or thinking about buying, thriving local businesses can contribute to property values, as they make neighbourhoods more attractive.

By keeping local shops and services afloat, these measures also indirectly support the property market, as vibrant communities often see steadier property demand. Construction Today notes that by bolstering the high street, the government aims to revitalise local economies, which can make towns and villages even more appealing to homebuyers.

The Energy Efficiency Push: Upgrades and Incentives

With energy efficiency high on the agenda, the government has extended incentives for energy-saving home upgrades. This includes support for electric vehicle (EV) charging points and zero-emission vehicles, alongside plans for more green initiatives. While these incentives don’t immediately lower house prices, they do make properties with energy-efficient features more attractive and potentially more valuable in the long run.

If you’re considering selling, upgrading to energy-efficient features can boost your property’s appeal, especially as energy costs remain high. Buyers are increasingly looking for homes that are sustainable and cost-effective to run. If you’re buying, keep an eye out for properties with these upgrades—they could save you money on utility bills and may be eligible for future government incentives.

The Long-Term Picture: A Steady Outlook for Hampshire’s Property Market

While the budget tackles immediate challenges, it also lays a foundation for stability in the housing market. The commitment to invest in infrastructure and public services should encourage long-term economic growth, making areas like Hampshire even more desirable. As Sky News mentions, although this budget may not be a game-changer, it introduces sensible adjustments that could bring stability to the housing market over time.

The OBR forecasts that the economy will grow at around 2.0% in 2025, with inflation expected to stabilise around the Bank of England’s 2% target after recent high levels. This stability could improve household confidence, making it easier to plan for property purchases and long-term investments.

What Does This Mean for Buyers and Sellers in Hampshire?

The 2024 Autumn Budget brings a mix of positives and practical considerations for anyone involved in the Hampshire property market. Here are the key takeaways:

• For Buyers: With extra stamp duty on second homes, there could be less competition from investors, especially for first-time buyers. Government plans to increase housing supply offer a hopeful outlook for affordability, though high interest rates mean budgeting carefully is essential.
• For Sellers: Now might be an opportune time to sell, as government investments in the housing market may lead to more balanced prices over time. Energy-efficient upgrades could make your property more attractive, and thriving local businesses, thanks to business rate relief, can enhance the value of homes in well-connected areas.
• For Everyone: Cost-of-living support and a focus on boosting local economies are positive steps, and the overall balanced approach in the budget suggests stability on the horizon for the UK housing market.

At Rowe & Co Homes, we understand that navigating the property market in today’s climate can feel complex. Whether you’re looking to buy, sell, or simply stay informed, our team is here to guide you through every step. This budget underscores the value of planning, patience, and making informed decisions to achieve your property goals. We’re optimistic about the future of Hampshire’s property market and look forward to helping you make the most of it.