Autumn Budget 2024 - PwC comments on the housing and stamp duty measures

Housing 

James Bailey, Housing Leader at PwC UK comments on the Budget announcements for the housing market: 

“The government’s £5bn boost for the housing sector signals a strong commitment to drive the supply of much-needed new homes and improve the quality of existing stock. The CPI +1% rent settlement for the next five years provides stability, offering variable financial benefits across the sector.

“Targeting £500 million in affordable housing grants directly to stalled projects could have a rapid economic impact, while reforms to Right to Buy and retention of 100% receipts empower Local Authorities to build more directly. Support for SMEs through a £3bn guarantee scheme addresses a key barrier to growth, and with improved access to public sector land, this could be a catalyst for sustainable expansion.”

“Place-based initiatives in Liverpool and Cambridge, along with steps to streamline planning policy, are encouraging. However, adding 100 new planning officers may fall short of what is required to unlock stalled sites. Additionally, funds allocated for the remediation of homes with safety issues are a positive step for affected residents, with further details needed on accelerating these programs.”

Stamp Duty

Aidan Coleman, Tax Partner leading our stamp duty practice: 

“With effect from 31 October, the stamp duty surcharge on the purchase of an “additional home” (i.e. where the purchaser already owns a residential property) increases from 3% to 5%. This will have a wider impact than the manifesto-trailed stamp duty change that increased the surplus for non-resident buyers - but is also expected to capture such transactions. This change is effective to purchases from the day after the Budget, unless the exchange took place prior to that date. Taking a property of £600k, an additional £12k of stamp duty will be payable.” 

“The Government is targeting individuals buying second homes and the buy to let market, with the aim of providing an advantage in the market to first time buyers and those moving home. However, this surcharge will also impact others on specific transactions, including housing developers and local authorities.In addition, for those simply moving home where there is an overlap period of owning two properties, the cash flow impact of making the higher payment and later claiming a refund increases”

“As trailed by Labour during the election campaign, the first time buyers threshold will revert back to £300k from 1 April 2025. This threshold was temporarily increased to £425k in 2022 - the Government has chosen not to extend this, meaning increased stamp duty costs for first time buyers of property over £300k.”

“Coming hot on the heels of the removal of Multiple Dwellings Relief, these measures see continued increased stamp duty cost on residential properties.”