10 Key Takeaways from the Autumn Budget 2024

Our CFO, Katie Keene, provides her 10 key takeaways following the Labour Government's Autumn Budget this week.

1. Investment in Public Finances: The budget introduces tax increases that will boost funding for essential public services such as healthcare, education, and infrastructure, addressing long-standing financial gaps. Labour’s goal is to establish fiscal stability through these measures.

2. Support for House Building: Increased investment in housebuilding and the expansion of social housing stock are positive and welcome developments. Key players in the UK homebuilding sector responded favourably, with collective share prices jumping by +3.5%, marking their largest one-day gain since May. However, some market critics question whether these initiatives will be implemented swiftly enough.

3. Muted Market Response: The overall market reaction has been relatively subdued, with minimal fluctuations in the pound sterling. Although the FTSE 250 showed initial strength, many announcements had been leaked prior to the event, allowing the market to absorb them in advance. Generally, investors seem to express confidence in the government’s £32 billion investment plans.

4. Increased Costs for Businesses: One of the most significant changes is the rise in Employer’s National Insurance contributions from 13.8% to 15%, applicable from a lower threshold of £5,000 (down from £9,100) starting April 2025. This adjustment will impact business overheads and may affect hiring decisions as companies re-evaluate their budgets. Many business leaders have noted that these increases could undermine their plans for staff pay raises and promotions in 2025.

   
   

5. Challenges for Landlords in the Private Rented Sector: Capital gains tax rates on residential properties remain unchanged at higher levels, however the stamp duty surcharge on second homes will rise from 3% to 5% immediately. This comes against the backdrop of the forthcoming Renters Reform Act, creating additional pressures for landlords.

   
   

6. Further Regulations for Landlords: The budget details new regulations for Landlords including rent caps, extended notice periods, eviction protections, updated minimum property standards, and enhanced licensing requirements. Whilst these measures provide greater protection for tenants, they may inadvertently drive some landlords out of the private rented sector.

   
   

7. The UK as a Business Base: We know that many landlords and agents operate ventures and businesses alongside their property portfolios. Whilst the budget maintains business asset disposal relief at £1 million, there are concerning changes to capital gains tax rates. Higher-rate taxpayers will see an increase from 20% to 24%, particularly affecting the sale of businesses, shares and assets, raising questions about future investment and liquidity planning.

   
   

8. Concerns Over Wealth Drain: Announced changes to non-domiciled status, capital gains tax increases, stamp duty rises, inheritance tax band freezes, and rising business costs may prompt many business owners and high earners to reconsider whether the UK is the right home for them long term. These changes could incentivize wealthy individuals to relocate abroad, potentially impacting the UK economy and growth in the long term.

   
   

9. Impact on Workers: Although the budget aims to raise funds from businesses to support public services for working people, many elements will challenge the average individual. They may see fewer opportunities in the workplace as their Employers struggle to absorb additional overheads. The government will raise income tax bands in line with inflation starting in 2028, providing long-term relief for taxpayers.

   
   

10. Interest Rate Outlook: The Bank of England will review interest rates on November 7th, with an 83% positive likelihood of a cut from the current 5% Interest rate, down from 94% market prediction immediately prior to the budget. This shift indicates ongoing uncertainty in economic forecasts amid new fiscal measures.

If you’d like to discuss any of these points further, the upcoming Renters Reform Bill, or how we can assist you in managing your property, please get in touch. At Apex, we offer peace of mind with hassle-free, guaranteed rent and the flexibility to request your properties back at any time.

If you’d like to discuss any of these changes in more detail, or if you’re interested in switching to a guaranteed rent model and moving away from the challenges of traditional AST lettings, don’t hesitate to get in touch. You can reach us at lettings@apexhousingsolutions.co.uk or by calling 0203 030 4241.