The October Budget impact property investing in many ways. Confirmed tax changes, housing policies and economic shifts will shape the outlook for landlords and investors.
The government presented the autumn budget on 30 October 2024. It introduced higher Stamp Duty surcharges, changes to Capital Gains Tax (CGT) and stricter rental rules also occurred. Anyone involved in property investing in 2025 needs to be aware of these changes.
In this article we look at how the October Budget Impact Property Investing, what the changes are and how it could affect investment strategies in the UK property market.
The Autumn Budget did not raise capital gains tax (CGT) rates for residential property. However, the government reaffirmed its commitment to reviewing property-related taxes, so future changes remain a possibility.
Also worth noting, while CGT rates on residential properties remained the same, the government raised CGT on commercial property sales, increasing the rates from 10% and 20% to 18% and 24%. If you hold commercial assets, it’s worth reassessing your long-term strategy to see if these changes affect your plans.
Keeping an eye on future tax changes will be crucial to avoid any surprises when selling a property.
One of the biggest changes in the budget was the rise in the Stamp Duty Land Tax (SDLT) surcharge. It went up from 3% to 5% for extra homes and corporate purchases, making buying second homes or rental properties more expensive.
Investors considering new purchases in 2025 will need to factor in these higher costs when assessing profitability, as well as understanding taxes and fees when buying a property.
Although inheritance tax (IHT) reforms were widely discussed before the budget, no immediate changes were introduced in the final announcement. However, with growing pressure for tax reforms, investors should remain prepared for potential changes in the future.
The government confirmed the plan to build 1.5 million new homes by 2030. However, with no new funding beyond current programmes, challenges such as planning delays and labor shortages could affect the achievement of this target. If construction remains slow, house prices and rental demand may stay high.
Additional funding was allocated to affordable housing projects, with an emphasis on supporting housing associations and local authorities in building more rental properties. Investors interested in social housing schemes may find new opportunities for growth.
Cladding removal and energy efficiency improvements will continue to receive government funding, but the responsibility for ensuring these standards are met will remain with landlords.
By 2028, all rental properties must have an EPC rating of C or higher. This could cause extra costs for landlords with older/inefficient properties to meet the ratings requirements.
Infrastructure investment was highlighted in the budget, but no major planning reforms were confirmed. Slow planning processes remain a barrier to large-scale development.
The Renters’ Rights Bill is expected to pass in 2025, bringing significant changes for landlords, including:
Tighter rules for private landlords are helping the build-to-rent sector grow. This attracts substantial investors who can follow the new laws while managing many properties, offering professionally managed rental homes with long-term security for tenants.
For those considering property investment, BTR offers a way to enter the rental market without the same risks individual landlords now face.
Prosperity Wealth not only has off-plan developments to invest in, we also have our own in-house Letting and Management operation – Lamont & Co. for built-to-rent investment opportunities.
With interest rates still elevated, affordability continues to be a challenge for tenants.
While inflation is expected to slow, the pressure on household finances means many will find it difficult to qualify for a mortgage or save for a deposit. This is likely to cause greater demand for affordable rental homes, especially in well-connected areas with strong job opportunities.
The Bank of England has suggested that interest rates could start to come down by mid-to-late 2025, but this will depend heavily on inflation over the next year. For homeowners and investors, this means that borrowing costs will remain high for the foreseeable future.
Lenders have tightened affordability tests, making it harder for some landlords to refinance or expand their portfolios. Investors will need to carefully assess their financial positions before taking on new mortgages.
No new support schemes were introduced for first-time buyers, leaving many to rely on existing options like First Homes and shared ownership. Without further support, affordability remains a challenge for those looking to enter the housing market.
House price growth is expected to remain moderate, with affordability constraints limiting large increases. Rental yields should remain strong, particularly in urban centres where demand continues to outstrip supply.
While tax and regulatory changes pose challenges, rental demand remains high and long-term capital growth is still achievable. Investors who adapt to new regulations and focus on affordable housing or BTR could find strong opportunities in 2025.
As well as the October Budget Impact Property Investing, the property landscape is evolving and property investment requires expert guidance more than ever. That’s where we come in. At Prosperity Wealth, we help investors navigate these challenges, ensuring you make the most of every investment.
Whether you’re expanding your portfolio or looking at how the October budget impact property investing, expert guidance can make all the difference. Speak to our team at Prosperity Wealth to ensure you’re making the right investment decisions in 2025. Call 0121 237 4610 or email info@prosperity-wealth.co.uk.
Yes, the autumn budget will have a direct impact on the housing market. The increase in Stamp Duty surcharges will raise costs for buy-to-let investors and second-home buyers, while new regulations for landlords could reshape the rental sector.
At the same time, government investment in affordable housing aims to boost supply, which may influence house prices and rental demand in certain areas. These changes will affect both buyers and investors, making it important to stay informed and adapt investment strategies accordingly.
The autumn budget will affect house prices by influencing taxation, interest rates, and government investment. If supply increases significantly, price growth may slow, but continued demand could keep prices stable in key areas.
The budget affects property developers by influencing planning reforms, infrastructure investment and affordable housing initiatives, which impact project viability and profitability.
The October budget impact property investing on second homes with higher Stamp Duty Land Tax (SDLT) fees and possible Capital Gains Tax (CGT) changes. This will increase costs when owning extra properties.
