Results of the Autumn Budget: What this means for your mortgage

Today, the Chancellor of the Exchequer, Rachel Reeves, delivered the first budget announcement for the new Labour government. This is the first budget made by a Labour government in over 14 years. 

Named the Autumn Budget, this budget is a big event for the country as it outlines the government’s plans for public spending, taxation, and economic policy for the upcoming year. 

While there were some big announcements for the financial market as a whole, whether you’re looking to buy or you currently have a mortgage, here’s what you need to know about how the Autumn Budget will impact the housing market.

Reform of Stamp Duty Land Tax

As many expected, the Chancellor addressed proposed changes to Stamp Duty Land Tax (SDLT). She has increased the rate of SDLT on second properties, raising it from 3% to 5% of the properties value. 

This will impact second homeowners and landlords. 

With no formal announcement made about the extension of SDLT relief, we must assume that the previous rules will take effect once again from 1 April 2025. 

This means that if you’re buying for the first time before then, you’ll still only need to pay Stamp Duty on properties valued over £425,000. From April 2025, this will drop back down to £300,000. 

For homemovers, you’ll have to pay Stamp Duty on the property’s value above £125,000, dropping from £250,000. 

If you’re not sure how this could impact your plans, talk to one of our mortgage advisers. They can offer expert advice on and guidance on the options available to you.

The impact on mortgage rates

Mortgage rates and base rates are not determined by the government, but rather the Bank of England’s Monetary Policy Committee (MPC). The base rate will affect how lenders set their mortgage rates, so the two are linked. 

There is likely to be a direct impact on the MPC’s decisions based on what’s been announced in the budget. 

Currently, the base rate is sitting at 5%. On 7th November, the MPC will decide whether it will stay at 5% or drop down. There’s always a chance it could increase, but this seems unlikely right now. 

If it does drop, mortgage rates could follow suit. Many lenders may have already reduced their mortgage rates to account for this, but we’ll likely still see an impact across the board.

To find out more about how the base rate impacts mortgage rates, check out our handy article:

Capital Gains Tax changes 

In our previous article, we predicted that there might be some changes to Capital Gains Tax (CGT) and this has now been confirmed in the budget. 

The Chancellor has increased the lower rate of CGT from 10% to 18%, and 24% to 28% for the higher rate of CGT. This marks a return to the previous rate of CGT.

This means that if you sell your property and make a profit, you’ll likely pay more in tax on the sale. However, this doesn’t apply to anyone moving from one property to another.

Funding for 1.5 million homes

The Chancellor specifically highlighted how the government would continue their promise to support the 1.5 million home mandate. They have pledged over £5 billion in government investment to support this initiative. They have also promised to increase investment in affordable homes programmes, pledging more than £3 billion in support of guarantees. They will also provide investments to renovate sites across the country. 

The government promised to put the right policies in place to increase the supply of affordable housing, and have heard from local authorities to give people a safe, secure, and affordable place to live. In order to do this, they will reduce the discounts on Right to Buy. 

They have promised to deliver on their manifesto pledge to hire hundreds of new planning officers, which will speed up building and ensure that projects don’t stall and create delays. 

They have also promised to improve the remediation of dangerous homes, with £1 billion invested to remove dangerous cladding. This will help flat and apartment owners who are struggling to sell their homes because of cladding issues.

We spoke to one of our expert new build advisers, Mark Pender, to get his thoughts on the government's plans for building:

How will this affect the housing market?

There isn’t really a one-size-fits-all solution to addressing all the issues the UK housing market is facing, but the government has laid out plans that aim to improve the country’s debt and fiscal responsibility. 

In essence, they’re trying to build a robust economic plan that accounts for many audiences. 

Circumstances are always changing, and our advisers are equipped to help you make a decision that's right for you. You can also try our calculators to explore your unique options:

What do you need to do next?

Following the Autumn Budget, there’s no need to do anything if you’re successfully managing to pay your monthly mortgage repayments, or your plans to buy your first home or move to your next is unaffected.

However, if you have concerns or need a hand in figuring out the next steps in your home buying journey, our advisers are always on hand to help. They can provide expert guidance and advice to take away the stress and uncertainty. Get in touch today: