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or prospective buyers, and homeowners looking to move, the Budget provides some long pined for certainty. Or, as Matt Henderson, Strutt & Parker’s residential research expert put it, the Budget has “finally allow people to make informed decisions”.

What the Budget means for the housing market

Tips for selling your property this autumn

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Taking the budget as a whole, there will be a small sigh of relief among many buyers and sellers who were expecting a ‘worst case scenario

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After the longest wait for a new government’s Budget in over 50 years, chancellor Rachel Reeves drew a line under the feverish speculation and set out her plans.

Second home and investment transactions may weaken over the remainder of 2024 as this change is priced into the market, but Strutt & Parker calculates that this is not likely to last for long. Back in 2016, when the initial 3% surcharge was brought in, the proportion of second home and investment transactions quickly stabilised after only one quarter of the tax, even at higher price bands, such as £2m+, where around 50% of transactions have to pay the HRAD, the Higher Rate for Additional Dwelling. Focusing on London, the capital looks likely to prove resilient to the higher rate of stamp duty on second homes, especially at the top end of the market. In an uncertain world, London remains an extremely attractive place to live, work and invest; and the numerous tax rises that have hit the second home market over recent years have failed so far to dent that. Also announced in October was Labour’s much-trailed scrapping of non-dom status. Reeves confirmed that she would replace the current regime with a residence-based system from April next year. The government has pledged that offshore trusts will no longer be able to be used to “shelter assets from inheritance tax”, and that there will be “transitional arrangements in place for people who have made plans based on current rules”.

Among the key announcements made, several points stand out to Strutt & Parker. Reeves raised the higher rate of stamp duty for second homes from 3% to 5%, a rise that is clearly “not insignificant”, according to Strutt & Parker’s Head of Residential Agency, Guy Robinson. But in the grand scheme of things, he acknowledges, it’s a “fairly modest adjustment” that is unlikely to deter most buyers seeking a second home. “They’re typically driven by the desire to secure a dream property and have the financial flexibility to absorb the added cost,” he explains.

In a way, what wasn’t in the Budget was almost as significant as what did finally make the cut. Motorists didn’t have to swallow a rise in fuel duty, for instance, which is good news for rural homeowners in particular. Rates of capital gains tax on residential property were also left untouched, which should help people feel they are in a place of flexibility to move, should they wish to. It’s been a slightly scratchy few months in Britain since Labour won the election, gaining power for the first time in nearly 15 years. But the housing market has reacted remarkably robustly to the change of regime, and with interest rates having been cut for the second time this year, the prospects for buyers and sellers alike look more encouraging compared to the period that followed the mini-budget in 2022. Strutt & Parker’s buyer demand across London and the regions in October was 10% up against September, and 40% up on October last year. More homes are coming up for sale too, as are the numbers of offers being received, and this is driving house price growth. Strutt & Parker expects values to increase by between 15 to 20% by 2028. Few would have envied Reeves’s task when she stood up at the dispatch box to deliver her first Budget, the first ever, of course, by a woman. But as Guy Robinson says, we now have that precious thing: a degree of security about how the government is going to spend, and raise, money over the coming years. “Taking the budget as a whole, there will be a small sigh of relief among many buyers and sellers who were expecting a ‘worst case scenario’.”

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Last month, Labour unveiled its long-awaited Budget. Strutt & Parker examines what the announcements could entail for homeowners – and why there are signs the housing market is back on a positive course.

James Gow, Strutt & Parker’s Head of London Residential Sales, doesn’t expect the proposals to put buyers off in prime and super-prime markets. In fact, he says, Strutt & Parker’s London offices saw a “flurry” of sales over the summer, in spite of rumours that the new government was planning on coming down hard on non-doms. “This illustrates just how desirable London continues to be on the global stage,” he says. Labour didn’t soften on its plans to introduce 20% VAT on private school fees. Reeves also confirmed that legislation will be introduced to strip private schools of their business rates relief from April next year. With the extra costs likely to be passed on to parents, demand for homes closer to reputable grammar and state schools could rise, says Kate Eales, Deputy Head of Residential Agency. “This is likely to have a knock-on effect on house price premiums in those catchment areas.”

Tips for selling your property this autumn

What the Budget means for the housing market

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