The soaring cost of living, which is having an increasingly crippling effect across the UK, left many of us waiting with baited breath to find out what Chancellor Jeremy Hunt would have to say in his Autumn Statement recently and whether it would be good news or bad news. So let’s see what the Autumn Statement means for the housing market.
While there was less said than expected about the UK housing market and the measures taken to protect it, there were a few potential positives to come out of it for anyone looking to buy a new property or sell their home.
The Statement, which was delivered to parliament on Thursday (November 17), hoped to make around £55bn in savings, which would be achieved through tax rises and cuts in government spending.
Unfortunately, it means that UK disposable incomes will be stretched even further in the coming months, as people struggle to meet the rising cost of living, taxation and mortgage rates. However, the hope is that these measures will enable the failing UK economy to eventually return to growth, stability and improved public services in time.
House prices are believed to be going down in the following year or so, although many have predicted that this won’t be quite as catastrophic a drop as some thought. The drop will hopefully be followed by a return to the more steady housing market which was seen prior to the pandemic. It is thought that house prices will eventually start to rise again, once the period of recession is over and the UK has a more stable economy.
What effect the changes to Stamp Duty Land Tax (SDLT) will have
For the UK housing market, the biggest point made in the Autumn statement was the decision to reverse former Chancellor Kwasi Kwarteng’s September mini budget changes which raised the residential nil rate tax threshold of SDLT from £125,000 to £250,000.
Mr Kwarteng’s cuts to SDLT mean that buyers have to pay much less tax when buying a new home and those savings can be put towards increased mortgage rates and the other fees which surround buying a property. But now there’s a deadline.
Jeremy Hunt announced that the stamp duty cuts would only remain in place until March 2025. This is likely to create a bottleneck in house buying in 2024, as many people choose to buy properties sooner rather than later in order to make the most of the lower taxation.
Mr Hunt said that the decision to limit the time that the cuts were in place, would create an incentive to support the housing market and the jobs associated with it by boosting transactions during the period the economy most needs it.
The massive rises in interest rates mean that people may be faced with higher mortgage bills sooner than they may have liked, but, when compared to the rising costs of rental prices, it may well be beneficial to make the most of the lower house prices and drop in SDLT and weather the storm for now.
While many housing experts have felt that Mr Hunt should have done more in the Autumn statement to help stimulate the UK housing market, by keeping in place the cuts to SDLT for a limited time, it might just be what the housing market needs to see through the coming months.
If you’re looking to buy a property and are looking for conveyancing solicitor who you can rely on to carry out the legal side give us a call today on 01243 823090 (Bognor Regis) / 01903 947947 (Steyning) to see how we can help.
