We’ve seen plenty of updates that affect the property market this last week, with the base interest rate being increased again on 22ndSeptember, and the mini budget being announced last Friday. The new Chancellor of the Exchequer, Kwasi Kwarteng, led the announcement by hailing it “the beginning of a new era”. We’ve rounded up below the key things you should know.

Stamp duty cuts

Stamp duty is to be cut from today. Nothing will be paid for the first £250,000 of property’s value – double the current amount allowed at £125,000. If you’re looking to move home, you could now save thousands of pounds.

The threshold for first-time buyers is to be increased from £300,000 to £425,000. Meanwhile if you’re a first-time buyer purchasing a property above this price, you can now claim relief up to £625,000, up from £500,000.

If you’re a first-time buyer, this will definitely help you make your first step onto the property ladder easier to afford and overall the changes should remove 200,000 people from paying stamp duty.

Scott Littlefair, Managing Director at Littlefairs Property Company said: “Following the rise in interest rates over the last few months, home movers and the property industry will all welcome the reduction in stamp duty announced today. This will soften the impact of rising mortgage rates and also lower the fixed costs of moving. It is also really important this is a tax change, not a Stamp Duty Holiday which would only have served to further distort the housing market.  This will also give an injection of confidence at just the right time.”

 

Base rate increases to 2.25%

The Bank of England has announced a 0.5% increase to the interest rate, taking it to 2.25%, the highest it has been for 14 years.

 

Help with household bills

Household bills are to be cut by an expected £1,400 this year with aid from energy price guarantees and a £400 grant. Millions of the most vulnerable households will receive additional payments, taking their total savings this year to £2,200.

The total cost of the energy package, including business support, over the next six months is estimated at £60bn. The Chancellor said it is “entirely appropriate for the Government to use our borrowing powers to fund temporary measures to support families and businesses”.
Changes to take home pay

The basic rate of income tax will be cut from 20% to 19% on 1 April next year.  It was already announced prior to this mini budget that April’s National Insurance hike introduced previously by Rishi Sunak is to be reversed from 6 November – saving money for businesses and 28 million workers.

From next April the 45% top rate of tax (applies to those earning £150,000) will be scrapped, so the top rate will be the 40% higher rate threshold.

If you need any advice on your property portfolio and how these changes affect your investment, please contact our experienced team on 01904 393989.