Limited Budget Impacts On Property Ownership
Amongst the many major changes introduced in yesterday’s first Labour Government Budget, our Cockermouth Branch Manager, Anya Caine, sees very little impact on average house buyers, but potentially higher costs for second home and rental property owners in the North West.
The hike to a 5% stamp duty rate on second properties will have a notable impact on landlords aiming to expand their portfolios, as well as buyers interested in purchasing second or holiday homes. The rise is likely to make property acquisition less attractive for prospective landlords and further restrict private rental supply, leading to even greater competition for rental properties and upward pressure on rent levels.
The increase in Capital Gains Tax, now at 18% for lower-rate and 24% for higher-rate taxpayers, also puts additional financial pressure on landlords looking to sell, which could accelerate the trend of landlords exiting the rental market, further tightening supply and pushing rents higher due to increased tenant demand.
Given that our area has a robust market for holiday properties, it will be interesting to observe how these changes might shape future demand and investment in this sector.
With property inheritance tax thresholds remaining unchanged until 2030, families and property investors have a measure of stability in the level of IHT liabilities, but adjustments to pension inheritance tax rules from 2027 may influence property-based estate planning for landlords and investors.
The scheduled reduction in stamp duty thresholds for first-time buyers and home movers in April 2025 could potentially slow transactions in these segments, with ripple effects on the broader property market.
On a positive note, a continued strong demand for home movers in this area, particularly the family market, coupled with limited supply, should help keep the market stable, and we are also hopeful for continuing reductions in mortgage interest rates, which would be a welcome change in today’s financial climate.
