Budget ‘24 expert local POVs
So, Chancellor Rachel Reeves’ dreaded budgetmaggedon (the first Labour one in 14 years) is over… phew!
And at least we all know where we stand, even if we don’t like it very much!
Let’s zone in on what it means for our clients – property buyers – & specifically look at what it means for the market in Norfolk.
Capital Gains Tax on residential property remains unchanged, so there recent reluctance to sell in fear of a rising CGT hit should not be a factor in this crucial Autumn market, where motivated buyers are trying to move mountains to get in for Christmas.
There is to be no extension to the current Stamp Duty Land Tax (SDLT) relief for first-time buyers, set to terminate March 2025 – meaning the market’s number one purchasing power right now is likely to remain the same, as FTB’s try to bag a property before the stamp duty bites. The time is now FTB’s. Go for it… cross the rubicon from increasingly priced rentals, which are only going to get worse (see point 3.)
The biggy in this part of the country – which is full of Norfolk second homes, rentals & holiday homes – is the rise in stamp duty charge in this sector: with landlords, buy to let investors & second home owners, set to take a 2% hike from 31 October 2024, increasing the rate from 3%, to a punchy 5%. Ouch. That’s £40,000 tax on an £800,000 property, to put it into real terms. Double ouch. This is sure to have an effect on the market here, at least in the short term.
Local property expert, insta story teller & savvy Savills estate agent, Ben Rivett told Flint Homes: “As with any changes to SDLT, we have to react dynamically, and once again find the sweet spot on pricing. This may take time for markets to adjust, and for buyers to work out what they are comfortable with. We were already adjusting off the back of the heat of the COVID markets, so this is just another challenge to advise on and proactively solve.”
Talking in more stats-driven detail about about the SDLT hike, premier property portal power Rightmove said: “With the rate at which no stamp duty is charged for home-movers due to fall from £250,000 to £125,000, anyone purchasing a property over this amount could face paying up to £2,500 more in stamp duty land tax. Meanwhile, the threshold rate at which first-time buyers do not pay stamp duty is likely to fall from £425,000 to £300,000. If a first-time buyer buys a property at the average UK price of £370,759 they will pay £3,538 in stamp duty from March 2025, compared with nothing now.”
“We may now see a rush of buyers, particularly those purchasing for the first time, either bringing their plans forward or trying to get their deal done before charges go up. It currently takes a lengthy 152 days on average to complete a property transaction once a sale is agreed, which would mean agreeing a deal tomorrow to complete on time. While this is an average and many will be hoping to complete more quickly, it highlights that those who are hoping to avoid higher charges will need to act quickly.”
The number of properties affected by the change in stamp duty thresholds varies by region. You can take a look at the percentage of homes currently free from stamp duty for people buying their first home, and how that will change after March 2025 on Rightmove’s superb blog.
In the next few days & weeks – when the budget blues have blown over, reality bites & people have to just get on with what’s in front of them – the market should hopefully return to the strong activity levels we have seen in what has been a busy late Summer & Autumn, with many local agents reporting record sales in September.
Rightmove reports the number of sales agreed is up 29% compared against figures from 2023 & the number of people making overtures to estate agents is also up, some 17%, with a rising number of properties on the market too, up 12%. This is all good news.
But with lower than the average (0.3% instead of 1.3% norm) growth in house prices nationally & more sellers coming on, the market will remain price critical.
All of this means your negotiation prowess, market knowledge, ability to get the right mortgage & pay the right price for a home & all the other property home buying skills will need to be on point, if you are going to get what you want – at the post budget price you need – this Autumn & into Q1 of 2025.
Is it time for some affordable, expertise?
Flint Homes are here.
We’re in the know.
We’re well connected.
And we’ll work closely with you to help you find you what you’re after… saving you money in the process.