November Property Market Analysis

What are your take-aways from the Autumn Budget? The fuel duty freeze or cheaper draught beer from the pub? Mentioned in the address were a few property-related items. If you own a home, the announcement concerning inheritance tax should be of interest.

The Chancellor, Rachel Reeves, declared she would freeze the current inheritance tax thresholds until 2030. Inheritance tax is a levy on a person's estate when they die and the rate set by the UK Government applies in England, Wales and Scotland. Inheritance tax will continue to be paid on assets worth more than £325,000, most of which is usually a property.

Inheritance tax and direct descendant

If the deceased’s estate includes a residence passed to direct descendants, this threshold is frozen at £500,000. When a tax free allowance is passed to a surviving spouse or civil partner, the threshold will remain at £1 million. Additionally and from April 2026, the first £1 million of combined business and agricultural assets will continue to attract zero inheritance tax.

Capital gains tax and additional properties

The Chancellor also chose to freeze the capital gains tax rate applied to the sale of an additional property. An additional property can take the form of a buy-to-let, a holiday home or an Airbnb. Reeves also left the capital gains tax-free allowance unchanged at £3,000.

As before, higher and additional rate tax payers in Great Britain will pay 24% gains made when selling an additional property. The amount billed to basic rate taxpayers stays at 18%. Capital gains tax applied to non-property assets will rise in line with residential rates.

A third Budget announcement was aimed squarely at those in England considering buying an additional property. The stamp duty surcharge on additional homes will increase on 31st October 2024. The old rate was 3% but this will rise to 5%.

This new stamp duty change joins a previous Government announcement. As of 1st April 2025, first-time buyers will start paying stamp duty on the portion of their purchase above £300,000. Previously, the zero stamp duty threshold was £425,000.

Now for some non-Budget news. First-time buyers have been enjoying excellent purchasing conditions, says Zoopla. Its October House Price Index revealed property novices are the most active buying group, accounting for 36% of all sales. The portal says they are being helped by landlords, who have been selling what are ideal starter homes.

Sales pick up pace

First-time buyers have been part of a very positive picture. Zoopla says sales activity has been running at the highest level since 2020. Analysis showed there are 26% more property sales agreed now, when compared to 2023.

Zoopla’s latest report also revealed that house prices are generally stable across the UK. In fact, the average property price rose by just £100 in the last month. The average house price is now £267,500.

Modest rent rises recorded

Rental values also showed signs of stabilising, as last month, the UK’s average rent for a new tenancy increased by 0.5%. The annual rate of growth is now almost half of what it was a year ago. The UK’s new average monthly rent is £1,331.

Although rent values in Wales have risen 7.3% in the last year, ministers have decided not to impose rent controls. Its latest white paper publication cited a lack of data, together with emerging evidence in Scotland, where the SNP want to make temporary rent controls permanent, as reasons not to introduce such measures. The Senedd felt rent controls could result in rent rises, restricted supply and an increased risk of homelessness.

If you would like to know more about your local property market, please get in touch.