Autumn Budget

The UK government’s Autumn Budget for 2024 has set out key changes likely to impact the mortgage landscape, especially for property investors, landlords, and first-time buyers. For those interested in a first-time buyer’s mortgage, buy to let mortgage options, or seeking loans for moving house, understanding these changes can be crucial.

1. Stamp Duty Changes on Second Homes and Investment Properties

One of the headline announcements impacting the property market is the increase in Stamp Duty on additional properties, raising the surcharge from 3% to 5%. This change directly affects those considering a buy to let mortgage for investment purposes, as the higher tax rate could dampen investor enthusiasm. Early reports have already shown landlords reconsidering property purchases due to increased costs, which may benefit first-time buyers who are seeking to enter the market with a first-time buyers mortgage. This shift is expected to reduce competition for primary residences, potentially creating more options for buyers looking for loans for moving house​.

2. Making the Mortgage Guarantee Scheme Permanent for First-Time Buyers

In an effort to make homeownership more attainable, the government has committed to a permanent first-time buyers mortgage guarantee scheme supporting 95% loan-to-value (LTV) lending. This stabilising move is intended to encourage lenders to offer competitive high-LTV loans, which are a lifeline for many first-time buyers with limited deposits. While some banks offer similar loans independently, the guarantee gives confidence to first-time buyers entering the market who may be relying on loans for moving house to secure their new home​

3. No Reduction in Standard Stamp Duty Rates for First-Time Buyers

Despite calls for reduced Stamp Duty rates, there was no direct change in relief for a first-time buyers mortgage in this Budget. Current thresholds will revert in April 2025, with the nil-rate threshold for first-time buyers decreasing from £425,000 to £300,000. Buyers considering loans for moving house may find it advantageous to act sooner rather than later, as these thresholds currently make purchases more affordable​

4. Impact on Mortgage Rates and House Prices

Though no immediate changes to interest rates were announced, the Budget’s policies could indirectly influence mortgage rates. The Office for Budget Responsibility forecasts that house price growth will slow, from 1.7% in 2024 to 1.1% by 2025, as average mortgage rates continue to rise. For anyone considering a buy to let mortgage or securing loans for moving house, this trend could mean higher monthly payments and careful budgeting. Rising rates may also impact remortgaging options, especially for those reliant on ultra-thin lending margins​

5. Encouraging Affordable Housing and Regeneration Initiatives

Addressing the housing supply crisis remains a priority, with funding allocated towards the construction of affordable homes. A significant portion of the Budget’s funding will support new housing developments, with £3 billion earmarked for small developers and affordable housing projects. For buyers utilising a first-time buyers mortgage, this increase in affordable housing could alleviate some market pressures by expanding the number of available properties. However, landlords planning to expand their portfolios with a buy to let mortgage may see reduced competition in certain areas​

6. Energy Efficiency Requirements for Landlords and Buy-to-Let Mortgages

To support green housing initiatives, the Budget includes expanded energy efficiency grants, especially targeting rental properties. This will enable landlords to upgrade properties to meet the strict Energy Performance Certificate (EPC) ratings required by 2030. While these improvements will enhance property value, it may affect buy-to-let investors. Landlords with a buy to let mortgage can benefit from grants for clean technologies, such as heat pumps and solar panels, allowing them to maintain compliance with upcoming regulations​

7. Long-Term Effect on the Buy-to-Let Market

Increased Stamp Duty and energy efficiency costs could discourage future investment in buy-to-let properties, affecting those considering a buy to let mortgage. However, the increase in affordable housing initiatives and new build-to-rent projects may stabilise rental stock over time. Buyers seeking loans for moving house or a first-time buyers mortgage may find these long-term shifts helpful, as they ease overall demand in the market​

Conclusion

Overall, the 2024 Autumn Budget introduces both challenges and opportunities for different sectors of the mortgage market. First-time buyers and those looking to secure a first-time buyers mortgage or loans for moving house may find the landscape becoming more favourable, particularly as investor demand declines. Meanwhile, buy-to-let investors face higher entry costs and new regulatory requirements, but they can leverage grants to help meet sustainability standards. As these changes evolve, it’s essential for prospective homeowners and investors to stay informed on how each policy may influence their plans.