Chancellor Rachel Reeves has unveiled changes to Stamp Duty Land Tax, aimed at boosting homeownership and supporting the housing market.
In a measure meant to help first-time buyers and those looking to move home, the Chancellor increased the higher rate for additional dwellings to 5%, effective from tomorrow (31st October).
The Chancellor said: “This will support over 130,000 additional transactions from people buying their first home or moving home over the next five years.
“We will give more people a safe, secure and affordable place to live.”
The reforms are part of the Government’s broader plans to increase housing supply and make homeownership more accessible.
The changes build on other housing policies announced in the budget, including £5bn of government investment to deliver thousands of new homes and support small house builders.
Concluding her remarks, Reeves said: “This budget provides the stability and support that homebuyers and the housing market need.
“We are determined to get Britain building again.”
However, commentators noted a lack of direct support for first-time buyers.
John Phillips, CEO of Spicerhaart and Just Mortgages, said: “Today’s Budget was an opportunity for Labour to show that its plans for housing are far more than just increasing supply.
“Sadly this wasn’t the case, with a real lack of support for buyers and the wider housing market.
“While increasing supply is necessary, we also need tangible support right now to increase routes to homeownership and reduce affordability pressures, particular for first-time buyers.
“While not mentioned, it seems the Stamp Duty relief will still end in April, removing important financial support for buyers and downsizers, while creating another cliff-edge deadline for the industry to deal with.
“We will have to see if the almost instant increase in stamp duty on second homes does indeed increase transactions as the Chancellor hopes, or whether as some worry, it will impact rental supply further and send rents higher – adding further pressure to those trying to save for deposits.
“With the Budget now done, we have to hope that some of the waiting and seeing will now clear and we see buyers moving forward with plans.
“Plus, with the consensus being that we will still see another cut to the base rate this year, we will hopefully see some activity from both lenders and potential buyers.
“It’s a shame though that it is left to the industry once again to do the heavy lifting to support buyers and keep the housing market moving.”
