Less expected was the rise in Stamp Duty (SDLT) with a further 2% added to the existing 3% surcharge already payable on the purchase of additional property beyond a principal primary residence. As an example, this brings the tax on a £350,000.00 weekend home/buy to let investment up to £22,500. There are concerns this will place further strain on those entering the private rental sector, thereby continuing to drive upward pressure on rental prices which have already seen considerable growth over the past 2 years.
Landlords certainly have more to think about when investing in property and for those looking to leave the sector, the minimal support for first time buyers in the budget means it is more important than ever to have a proactive agent working on their behalf to help them navigate the market and liquidate their asset(s).
The prospect of lower interest rates on the horizon may be a glimmer of hope for those with a close eye on the market, although any breaks in this regard are unlikely to entirely offset the additional tax liability to which they will be subject. Additionally, some homeowners may have feared a cut in the inheritance tax relief available to them, but, the additional threshold available remains untouched for now.
Instead, we understand that we will see a more gradual increase in the exposure to inheritance tax, as more individuals are drawn within the impacted thresholds. In housing terms, one might expect to see a tentative increase in the desire to downsize earlier and pass property assets down via generations, but time will tell.
Of paramount importance to our region is that land owners will be subject to less agricultural and business property relief with effect from April 2026. We understand this will reduce the tax advantages of owning such assets – the paucity of supply to the market in this regard means the true impact on values is arguably yet to be felt.
In summary, it is difficult to accurately quantify the impact of the announced changes on the market at the time of writing although as a group, we are choosing to remain cautiously optimistic that we might continue build on the growth we have seen through 2024. Pricing accurately and appropriately for the market place remains of utmost importance, and ensuring a well-presented, targeted, and proactive marketing campaign will continue to form the bedrock of any successful sale, let or holiday let.
Should you require advice or opinion in respect of any of these three areas, please do not hesitate to reach out to one of our industry experts.
Lewis Wingate – Director
