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Industry reacts to Labour’s first budget in 14 years

Chancellor Rachel Reeves has unveiled changes to property taxation and housing investment aimed at reshaping the UK’s housing landscape. This budget presented a bold response to ongoing housing shortages and affordability challenges, pairing an expanded stamp duty surcharge on second homes with a £5 billion commitment to increasing affordable housing supply across the country.

Reeves announced a 2% increase in the stamp duty surcharge for second-home purchases, raising it from 3% to 5% effective immediately. Alongside this tax shift, she pledged £3.1 billion to boost the Affordable Homes Programme, as well as £3 billion in financial support and guarantees for small housebuilders, targeting increased housing supply for a broad spectrum of buyers. Tim Bannister, Rightmove’s property expert commented:

“Increasing stamp duty on additional home purchases by 2% means that, based on the average asking price for a home (£371,958), a landlord could face an additional charge of more than £7,000 from tomorrow when buying a property. In the short-term, some landlords may need to pause for thought, but in the longer-term it becomes yet another charge that landlords wanting to invest in buy-to-let will have to become accustomed to and factor into their decision making. Overall, we need more homes in the rented sector not fewer, but in recent times we have seen record levels of stock leaving the rental market.

There was no mention of retaining the current residential property thresholds for paying stamp duty, which means we expect that the typical first-time buyer will be over £3,500 worse off come 1st April based on current prices. After paying fees, carrying out any surveys, and stretching their budget with high mortgage rates, this will be an unwelcome additional charge next Spring.”

Simon Brown, Landmark Information Group CEO, said that their data “clearly shows the significant affordability constraints currently weighing down the housing market”. He added:

“With interest rates still relatively high and unstable, home-movers are unable or hesitant to take the leap, resulting in completion levels falling to an all-time low. What the market urgently now needs is support to help transactions progress at pace, rather than adding further pressure on movers through increased costs.

A healthy home-moving market benefits not just buyers but the wider economy too, as movers spend money on home decoration and renovations—often in the local community. Yet, the home-moving process remains painfully slow, with the average transaction taking 123 days to complete. Addressing these inefficiencies is crucial—improving digitalisation, data-sharing, and speeding up the process would help alleviate current market pressures without adding extra financial burdens on home buyers.

The decision from Government to not extend existing stamp duty exemptions for primary residences will inevitably create a rush of transactions as movers scramble to complete before the proposed stamp duty deadline on 31st March 2025 – something conveyancers, in particular, are already preparing for. However, with average completion times already so slow, many buyers may not make the deadline, creating a ‘cliff edge’ effect. After this surge, transactions risk stalling dramatically, leaving the market in an even more fragile state. We urge the Government to consider the long-term impact of this measure and focus on working with industry to improve the efficiency of the home-moving process – mitigating the market dampening effects.”

Joe Pepper, UK Chief Executive Office at PEXA, said committing to the building of 1.5 million homes with a £3.1bn investment is “fantastic for first time buyers” and a “sizable investment” in affordable homes is welcome as a longer-term fix of the short supply of housing stock. He continued:

“Doing so will naturally create economic growth and stimulate other industries in a wider sense. But there is a huge gaping problem that has not been addressed – how are we going to actually deliver this benefit, if the back end infrastructure supporting the housing market, both for remortgaging and sale and purchase, is simply not fit for purpose? The government said it would ‘put the right policies in place’ to make this a reality, but it has missed one key detail: the urgent need for government commitment to support private investment in the modernisation of technology to make any of this a reality, and to actually benefit both mortgage market professionals and consumers.”

Nick Hale, CEO of Movera said that the Chancellor “clearly focused on themes like stability and growth, aiming to steady the nation’s finances while still leaving room for economic opportunity”. He added:

“Yet, this balancing act also meant tough choices, and nowhere is this more apparent than in the handling of support measures for the spluttering housing market. The decision not to extend the increased nil-rate threshold for First Time Buyers’ Relief, which was temporarily increased from £300,000 to £425,000 by the previous government, has introduced uncertainty into an already strained housing sector. With the average house price in England hovering around £310,000, many first-time buyers relied on this temporary relief to offset rising costs. Now, the impending April 2025 deadline creates a “cliff edge” effect that could push prospective homeowners into a buying frenzy to avoid higher Stamp Duty Land Tax (SDLT) costs after the threshold reverts. This rush may inflate prices further in the short term, driving demand up temporarily, only to see a sharp dip post-deadline.

Additionally, with no replacement schemes like Help to Buy on the horizon, affordability remains a significant barrier. The emphasis on boosting housing supply is beneficial in theory, but without mechanisms to make these new homes accessible to average buyers, there is a risk of oversupply in the wrong market segments, deepening the affordability crisis. Ultimately, a more balanced policy addressing both supply and affordability is essential to foster a sustainable path to homeownership in today’s economic climate.”

Elsewhere, the world of legal tech weight in with Gemma Fulbrook-Felstead, Operations Director at Collaborative Conveyancing saying

“The Government’s budget will have both short and long-term effects on the conveyancing industry. With the Stamp Duty Land Tax falling from March 2025, a rush to complete transactions before the deadline is expected, similar to the Stamp Duty ‘holiday’ from 2020 to 2021. Combined with a reduced number of conveyancers operating within the industry, this will create further pressure and could extend transaction times. Consequently, the market may see a higher volume of transactions over the winter months compared to previous years.

The long-term effects of the budget will result from the Government’s plan to build more affordable and sustainable housing while unlocking brownfield sites. This will have a substantial knock-on effect on the conveyancing industry, with the number of enquiries expected to rise due to the complexity of land use and environmental considerations.

We understand the pressure conveyancers are already under, and the Landmark Information Group report highlighted this frustration, showing that half of their working day is spent chasing other stakeholders or being chased by them. We know that there is a desire within the industry to introduce new tools that will support conveyancers by alleviating administrative burdens, improving communication, and providing greater clarity and implementing such tools could mitigate the issues faced during previous stamp duty deadlines and help deal with the expected rise in enquiries.”

Ed Boulle, Co-Founder and CSO of Orbital Witness added

“With no change to April’s upcoming SDLT changes announced in today’s budget, conveyancers must now prepare themselves to meet a surge in client demand — especially from first-time buyers aiming to complete before the increase takes effect. A proactive, considered approach is now required by firms to meet growing client demand over the coming months, without compromising service quality or staff wellbeing. For firms slow to adopt technology, today’s budget may mark a tipping point from ‘nice-to-have’ to necessity, as unlocking longer-term efficiencies will be vital to managing the influx ahead.”

Tim Bannister concluded that we may “now see a rush of buyers”, particularly those purchasing for the first time, either bringing their plans forward or trying to get their deal done before charges go up. He said:

“It currently takes a lengthy 152 days on average to complete a property transaction once a sale is agreed, which would mean agreeing a deal tomorrow to complete on time. While this is an average and many will be hoping to complete more quickly, it highlights that those who are hoping to avoid higher charges will need to act quickly.

It’s still early days for the government and it’s encouraging to hear its wider commitments to housebuilding, but we are hoping for more support for first-time buyers and making the existing thresholds permanent would have been a start.”

Nathan Reilly, Director of  Twenty7tec said:

“It’s hard listening to the Autumn statement and recent announcements on housing, but without a single reference to the mortgage market. Now, in part, that’s a sign that the mortgage market is incredibly responsive and adapts to change quicker than many other sectors. But there are wrinkles in the market that only the Government can help to address and today, they failed to do so.

There was an opportunity to do something clever for both those who want to downsize and First Time Buyers. But there was nothing hidden in the Treasury documents, apart from a consultation on Help to Buy without any real specifics.

As a result, the market remains heavily reliant on Buy To Let landlords to get the lower rungs of the property ladder working; however we are already seeing a decline here. But those landlords just got hit with an increase from 3% to 5% in SDLT, effective tomorrow. That is going to materially affect how the market works. That’s compounded by CGT rates rising too. CGT remains the same for property investments, but CGT rises on other investments will almost certainly impact on the funds available for investment by landlords and potential landlords going forwards. Come Friday, we’ll begin to see how this has affected the market when lenders have adjusted their products and landlords recalibrated their appetite.”

Anthony Coding, RBC Capital Markets said the Labour Party came “flying out of the blocks after winning the keys to Number 10”, and “planning reform was the big idea”. He added:

“The Budget maintained that momentum focusing on measures to boost the supply of social and affordable housing. By contrast there was no additional assistance for first time buyers, and Capital Gains Tax rates on property remained unchanged, but those with the broadest shoulders and fortunate enough to be buying second or additional homes will be hit by a significant increase in Stamp Duty if exchanging contracts (for house purchase) from tomorrow. “

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