Highlights of the Budget

Wednesday 30th October has been marked in our calendars for weeks as Chancellor, Rachel Reeves, delivered her inaugural Budget. We've pulled together the highlights that will impact the housebuilding industry.??

The national minimum wage for over-21s will rise in accordance with the cost-of-living crisis to ￡12.21, a rise of 6.7%, with the government saying more than three million workers will benefit.?

In terms of stamp duty, currently, those buying their first home are exempt from Stamp Duty on up to ￡425,000 of their property’s price. This threshold was increased from ￡300,000 in the 2022 mini-budget as a temporary measure. Despite pressure on the government to freeze the thresholds at their current level, the threshold will increase from April next year.??

For those buying a second home, Rachel Reeves announced that the government will increase the stamp duty land surcharge by 2% to 5% effective from 31st October 2024.??

The speculation around Rachel Reeves’ plans for capital gains tax (CGT) has been rife. And today, it was confirmed that she will increase CGT rates from 10% to 18% and the higher rate from 20% to 24%. The rates on residential property will remain at 18% and 24%. ?

To “help get Britain building” the Chancellor says the government will invest more than ￡5 billion to deliver their housing plan. She says this Budget will increase the Affordable Homes Programme to ￡3.1 billion, provide ￡3 billion worth of support and guarantees to increase the supply of homes and support small housebuilders. She went on to promise to provide investment to resonate sites across the country – including Liverpool Central Docks – to deliver 2,000 new homes.?

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Nationwide will offer bigger 0% loans for green retrofitting?

Originally introduced in 2023, Nationwide is upping the amount its mortgage customers can borrow interest-free to make their homes “greener” after seeing low take-up of its previous offering. The building society is offering interest-free loans of up to ￡20,000, an increase of ￡5,000 from the year prior.??

The 0% interest additional borrowing products, which needs to be spent on improving a property’s energy efficiency, enabling Nationwide mortgage customers to borrow between ￡5,000 and ￡20,000 up to a maximum of 90% loan-to-value (LTV) across either a two or five-year term.??

But it said take-up has been low, with only 1,900 applications completed since its launch until the end of September 2024, totalling ￡21.1 million in lending. The average loan handed out under the initiative comes in at ￡12,300.??

Currently, new customers have to wait six months before becoming eligible to apply for the loan, but the society is now removing that requirement and customers can now apply for enhanced green borrowing as soon as their mortgage has completed.??

Rightmove says the number of homes sold in the UK is up by a third??

New data from Rightmove shows the number of homes being sold is up by almost a third year-on-year, so far this year. Although the traditional autumn price bump has failed to emerge due to buyers being spoilt for choice, with the number of homes for sale at a 10 year high.?

The number of sales agreed is up by 29%, with the number of house hunters contacting estate agents up by 17%, despite some market uncertainty caused by the lead up to today’s budget.??

Tim Bannister, director of property science at Rightmove, said “Sales activity has not only bounced back from the low of last year but has continued an upward trajectory. There is also a healthy level of underlying buyer demand as people continue to plan their next move.”?

Their latest house price index estimates that the number of homes for sale is 12% higher than a year ago and is at the highest level per estate agent since 2014. This has provided buyers with more choice and negotiating power, which has meant the average price of a home coming to the market has risen just 0.3% month-on-month to ￡371,958, which is down on the long-term average of a 1.3% increase in October.??

The property portal said that while the outlook for the market in 2025 remains positive, there is still concern about buyer affordability, with some buyers holding off until mortgage rates drop. The average five-year fixed mortgage rate is 4.61% up from 4.55% last week, the first weekly increase since May.??

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