Chancellor Rachel Reeves' Budget:
Key Concerns for the UK Mortgage Market and Property Sector

Budget 2024: Key Concerns for the UK Mortgage Market and Property Sector

As the government prepares to deliver its Autumn Budget, there is growing speculation within the UK mortgage and property sectors about potential changes to taxation and housing policy. Central to the conversation are possible adjustments to Capital Gains Tax (CGT) and business tax regulations, which are creating uncertainty for property investors and developers.

Housing Market Concerns

There is increasing concern that potential changes to CGT could impact investment behaviour in the property sector. Some market participants anticipate that tax alignment with personal income brackets could be under consideration. Although it is unclear whether changes would apply to second homes or buy-to-let properties, uncertainty around future policy is contributing to a rise in the number of rental properties being listed for sale.

This trend emerges at a time of high rental demand, raising concerns that reduced rental supply could add further strain to housing affordability—particularly for those seeking their first home.

Council Housing and Property Development Challenges

Planned public investment in council housing has been positively received by larger developers, yet structural challenges continue to limit the pace of delivery. The construction sector faces delays within the planning system and increased costs associated with new environmental standards, including those linked to energy efficiency regulations.

These factors are affecting the sector’s ability to meet national housing targets, contributing to the ongoing shortfall in new home construction and exacerbating supply constraints across the UK.

Inflation, Interest Rates, and Mortgage Affordability

While inflation has continued to decline, interest rates remain elevated, placing pressure on mortgage affordability for many households. There are ongoing calls for the Bank of England to consider more significant reductions in the base rate to support homeowners and ease financial strain.

In addition, the scheduled end of temporary property tax incentives, such as the Stamp Duty exemption, may introduce further challenges for first-time buyers unless additional support measures are introduced.

Looking Ahead: Budget Implications for the Housing Market

With the Autumn Budget approaching, stakeholders across the housing and mortgage markets are closely monitoring potential policy shifts. Measures that impact tax treatment, housing development, and affordability support will play a significant role in shaping the near-term outlook for the sector.

Mortgage One: Supporting You Through Market Changes

As policy decisions unfold, staying informed is essential. Whether you're remortgaging, buying a home, or investing in property, Mortgage One offers expert advice to help you navigate changes in the mortgage and housing market. Contact us for tailored guidance and support in finding the right solution for your needs.