The UK’s Autumn Budget 2024, presented by Chancellor Rachel Reeves, has introduced significant updates affecting landlords, prospective buyers, and those involved in housing development. With policy shifts around taxes, housing affordability, energy efficiency, and wages, here’s an overview of key takeaways and their implications for the UK property market.
1. Energy Efficiency Grants for Property Improvements
As part of the government’s commitment to environmental goals, the budget introduces new energy efficiency grants and incentives for landlords. These grants aim to help landlords improve their properties’ Energy Performance Certificate (EPC) ratings, with a minimum target of “C” by 2030. Funding for upgrades, such as insulation and heat pumps, will alleviate some of the financial burden for landlords while supporting the UK’s green agenda. For landlords, these improvements may enhance property value and yield long-term savings through reduced energy costs, creating a more attractive offering for eco-conscious tenants.
2. Housing Development and Planning Reform
The budget includes over £5 billion to boost housing development, particularly on brownfield sites, along with plans to streamline the planning process. This move supports the construction of more affordable housing and build-to-rent developments, which could ease rental pressure in urban areas. Property investors and developers can expect a clearer and faster path to approval for projects, especially those prioritising affordable housing options, which might contribute to a more balanced market with increased supply.
3. Stability in Capital Gains Tax (CGT) Rates
In a somewhat unexpected move, CGT rates remain at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers, providing stability for landlords considering selling property. Although there’s no immediate change, property investors should keep an eye on potential rate adjustments in future budgets as the government seeks additional revenue sources.
4. National Living Wage and National Insurance Changes
Starting April 2025, the National Living Wage will rise to £12.21 per hour, and employer National Insurance contributions will increase from 13.8% to 15%. These changes may impact landlords who employ staff directly, as payroll expenses will increase. Additionally, tenants with improved income might experience a boost in rental affordability, potentially influencing rental demand.
A Balanced Approach for Landlords, Buyers, and Renters
The Autumn Budget 2024 underscores the government’s priorities of housing affordability, environmental sustainability, and fiscal responsibility. For landlords, the budget changes may necessitate strategic planning, especially around rising taxes and energy efficiency mandates. Prospective buyers may find less competition from investors, while renters could see more options as housing development initiatives take effect.
For more information on navigating these changes or investing in UK property, feel free to reach out to our team at Bromley Property Company. We’re here to help you make informed property decisions in this evolving market.