On Wednesday, the Chancellor Rachel Reeves delivered the long-awaited Autumn Budget, claiming this will raise around £40billion in taxes, a “black hole” Labour largely blame on the previous Conservative Government.
She spoke for over an hour, delivering measures designed “not to hurt working people”, although the definition of working people was unclear. As always, people will all be affected in different ways, with investment announced for some sectors, and cuts for others. The Chancellor ended her statement by saying this budget will “restore stability and rebuild Britain”.
Focussing on measures which may impact housing, mortgages and affordability, there are some key points we’ve picked out:
Housing
£1billion to accelerate the removal of dangerous cladding on homes, following the Grenfell Tower Report.
Invest £5billion to deliver Labour’s housing plan.
Increase the Affordable Homes Programme to £3.1billion. They say they will provide support and guarantees to increase the supply of homes and support small house builders.
Provide investment to renovate sites, such as Liverpool Docks to deliver 2000 homes.
Reduce Right-to-Buy discounts. Local authorities will retain receipts from the sale of social housing, to be reinvested in existing stock and new supply.
Stamp Duty for second homes and investment properties in England and Northern Ireland will increase from 2% to 5% with immediate effect (from 31st October 2024)
There was no mention of freezing the thresholds for stamp duty, so we expect thresholds to reduce from the end of March 2025. This would mean becoming liable for stamp duty when purchasing properties for £125,000 or above (or £300,000 for First Time Buyers), down from £250,000 and £425,000 respectively.
*If you have concerns regarding a purchase in progress and whether you are affected, we suggest you speak with a tax specialist and your solicitor in relation to SDLT due on completion*
Personal Taxes, Wages & Affordability
Minimum wage to increase from April 2025. The National Living Wage for those over 21 will rise to £12.21 per hour. The minimum wage will be £10 per hour for 18, 19 and 20 year olds, and £7.55 for 16 and 17 year olds.
The apprentice rate for under 19’s or those over 19 in the first year of their apprenticeship will rise to £7.55.
Freeze on income tax and National Insurance thresholds to end in 2028, preventing people from being dragged into higher tax bands as wages rise.
Capital gains tax paid on profits from selling shares will increase from up to 20% to up to 40%. Rates on additional property sales will stay the same.
Freeze on inheritance tax thresholds extended beyond 2028 to 2030.
5p cut to fuel duty kept for another year, to April 2026.
Tax on tobacco and alcohol to increase, other than tax on draught drinks, which has been cut by 1.7%.
£2 cap on single bus fares in England increased to £3 from January 2025.
VAT at the standard 20% rate will be added to private school fees from January 2025.
Universal Credit to rise by 1.7% in April, in line with inflation. There will be a review of health and disability benefits, and carers will also be able to earn more before losing their benefits.
State Pension will be going up by 4.1% in April.
Business Taxes
Firms to pay National Insurance on workers’ earnings above £5000 from April 2025, down from £9,100 currently, with the rate increasing from 13.8% to 15%.
Employment allowance, which allows companies to reduce their NI liability, to increase from £5,000 to £10,500.
Main rate of corporation tax, paid by businesses on taxable profits over £250,000 to stay at 25% until the next election.
Looking to purchase a property or refinance?
Many of the measures announced today had already been rumoured. We have seen lenders reduce interest rates in recent weeks and they would have factored some of these measures in, but we await their reaction to the full Autumn Budget. The next announcement from the Bank of England on the base rate is also due on 7th November.
We can search the whole of the market for the most suitable and affordable mortgage for you, and are up to date with the latest deals and criteria available.
To discuss your mortgage or protection needs, contact us on 01702 538800 or email enquiries@ingard.co.uk
