Mehran Charania, director of Ready Steady Store
Announced on the 30th of October 2024, Labour’s first budget in 14 years arrived with both opportunities and challenges for the UK housing market. From a £500-million-pound boost to the Affordable Homes Programme – aimed at advancing the government’s ambitions of building 1.5 million affordable homes by 2029 – to a £3 billion support package for Build-to-Rent developments, there are certainly signs of positive change for property growth. For homeowners, however, rising taxes and a harsher economic landscape could mean that careful planning is needed for survival.
How does the Autumn budget impact housing?
One of the most talked-about measures in the housing market was the 2% rise in stamp duty due on second homes and buy-to-let properties. Raising this cost to 5% is a move designed to curb investment competition in the housing market and, whilst it doesn’t affect those looking to buy a primary residence directly, it could have indirect effects on the property market overall. With fewer landlords choosing to remain in or enter the rental sector, rental supply may tighten, pushing rents up higher. Rising rent prices could then impact homeowners in one of two main ways. Firstly, they could make it more challenging for prospective buyers to save and get onto the property ladder – and secondly, by creating greater demand from renters eager to get away from rising prices by purchasing their own home, competition and prices in the sales market will likewise rise.
The freeze on both nil-rate bands of inheritance tax until 2030 has equally drawn criticism. Had it risen with inflation, this threshold would now be around £504,000 (when rounding up), which means that more estates – including modestly valued homes – might incur tax costs that families hadn’t budgeted for when passing along. Indeed, with average house process now at £371,958 according to the Big Issue, the freeze could leave more people out in the cold, facing the possibility of forced property sales to cover unexpected tax obligations.
Thankfully, there are things people can do to protect themselves from such fluctuations in the market, whether they suddenly find themselves with an unexpected move from a forced sale, find themselves waiting for longer to purchase their ideal first home or have decided to wait before selling an existing home on, in the hope that the market might soon settle down.
Hold your horses: why delaying that move might make sense
With the market still uncertain, it may be better to wait before diving head-first into a home sale or purchase. With higher tax burdens, many landlords may exit the rental sector or pass rising costs onto tenants – and whilst the government aims to increase rental options, this may drive competition between buyers, with an increase in the number of people looking to break out of the rental game into homeownership putting upward pressure on house prices. For those considering a move, holding off until prices stabilise may therefore be best, preventing unnecessary financial strain at a difficult economic time.
The freeze on inheritance tax could also lead to more properties becoming taxable as home values increase, particularly in higher-priced areas. This may prompt people to sell inherited properties or downsize to avoid tax implications, potentially increasing the supply of homes in the market over time and eventually, creating more favourable conditions for buyers who are able to bide their time.
The need to pack up
Whilst pausing plans may help aspiring and current homeowners alike to dodge additional adjustments and tax implications, those who decide to postpone their next major move will likely need an interim space for their belongings. Whether you need somewhere to store your stuff before finding your own first home to avoid overpaying on rent or overcrowding parents, or want to keep your personal items out of the way so you’re ready to sell up when the time is right – self storage facilities are one of the best ways to keep things safe, organised and accessible, without pressure to immediately sort or discard items. This option is particularly great for those pressed for time, as you can always go back to things and sort through them later. With many people facing longer timelines before they find the right property and get mortgages accepted, these solutions take away the stress of dealing with items large and small, even without a strict moving date in sight.
Those who are renovating or making space to rent out part of their inherited homes to offset taxes likewise benefit from storage solutions. It’s an easy, affordable way to free up rooms and get things out of sight, without the hassle of moving entirely.
Multi-generational living
Certain families – and particularly, younger family members – are similarly turning to multi-generational living to navigate the soaring cost of living. For many, this can be a financially beneficial choice, allowing family members to share costs and avoid duplicate tax burdens. Shared living arrangements likewise allow younger buyers to save to help them enter the property market sooner. The only drawback is that space may be limited, once again calling for people to think outside the storage box.
A strong safety net
At first glance, then, it may seem like the Autumn Budget won’t affect homeowners too directly. Nevertheless, there are plenty of indirect costs that could take their toll if movers aren’t patient. Take the increase in National Insurance for employers, for example. Whilst company owners are most clearly affected, this could also impact current and would-be homeowners, as the additional costs on business could trickle down to affect bonuses, wage growth and other financial benefits behind homeownership. Building an emergency fund and prioritising savings throughout this where possible can protect homeowners from potential future fluctuations in disposable income, ensuring they won’t be negatively impacted by mortgage affordability.
Patience and preparation
Ultimately, homeowners and home-seekers alike will need a mixture of patience, practicality and foresight to pull through this. Whether it’s putting off a big move, making clever use of self-storage or rethinking family living arrangements, there are plenty of things people can do to remain resilient amidst these new economic shifts. Yes, the budget has its opportunities, but it also has its challenges – and this is something that can only be beaten with a willingness to adapt and use smart planning. It’s all about protecting your finances and possessions to ensure you’re ready to face whatever’s waiting for us in 2025.
Established in 2005, Ready Steady Store is one of the fastest growing self storage providers with cost effective storage units located in the Midlands, and South, North and East of England.
