The property market has faced turbulence over the last few months as a result of the mini budget which was announced by former Prime Minister Liz Truss and chancellor Kwasi Kwarteng. After the then-government's plans was unveiled back in September, mortgage lenders began wiping hundreds of deals off the market due to fears that the Bank of England may raise interest rates to bring down inflation.
At the start of November, the Bank of England raised interest rates to 3 percent - which is the highest base rate since the recession in 2008. The 0.75 per cent rise is also the biggest interest rate increase since 1989 and the eighth consecutive time that the Bank has raised rates in less than a year.
Since then, worry has mounted amongst homeowners and first-time buyers as with higher interest rates come higher mortgage repayments, making owning a home even more unaffordable amid the cost of living crisis.
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It is for these reasons that homeowners were expecting that the Chancellor Jeremy Hunt may announce some help with mortgages in the Autumn Budget today (November 17), however they were left feeling disappointed.
Prime Minister Rishi Sunak's Chancellor addressed several tax hikes and spending cuts he will be implementing in the House of Commons on Thursday to help bring down inflation and reduce the cost of living, but there was no direct mention of help for the UK property market.
Amongst the announcements made, the Chancellor announced the stamp duty tax cut will end in March 2025. This means that the current threshold of £250,000 for homeowners will be reduced to £125,000, and for first time buyers this will lower from £425,000 to £300,000.
This is a reversal of the stamp duty tax cut plans announced in the mini budget, with more homeowners and first-time buyers now expected to pay the tax once again from March 2025.
Speaking about this decision, Rightmove’s property expert Tim Bannister said: “The clock now ticking on potential stamp duty savings will bring a bit more urgency for people trying to get on the ladder or trade up in the next few years.
"It’s likely to be most challenging for first-time buyers with smaller deposits, as we know it’s currently taking them an average of five years to save up enough for a deposit."
The only other announcement made regarding the property market is that homeowners on Universal Credit will be able to apply for Support for Mortgage Interest loans after 3 months instead of 9 months, including those in employment, which will come into effect in Spring 2023.
Taking to Twitter, Martin Lewis said: "Mortgages: Little said but Support For Mortgage Interest for those who've lost jobs to be claimable after 3 not 9mth and must have 0 earnings rule will be scrapped."
Following the government's lack of announcements for initiatives to help the property market in the Autumn Budget, experts feel homeowners have been 'ignored'.
Marc von Grundherr, director of Benham and Reeves, says: "Homebuyers have been stretched to breaking point in recent weeks, not only by the rising cost of living, but also due to increasing mortgage costs.
"So they may well feel that they’ve been shown the cold shoulder today with the absence of any meaningful initiative designed to help stimulate the UK property market. Even more so given that the previous reprieve offered in the way of a stamp duty cut will now only run until the end of March 2025.
"It's a risky strategy and one that confirms that the Conservative’s are no longer the party of the UK homeowner, which is sure to lose them votes further down the line.”
James Forrester, managing director of Barrows and Forrester,agreed: "It’s no surprise that the nation’s homebuyers and sellers have been ignored this time around, although today can be viewed as a golden opportunity missed to push growth within the sector."
Chris Hodgkinson, managing director of House Buyer Bureau, added: "We can expect the Bank of England to act with a further hike to interest rates in the immediate future and this will put even greater strain on our household finances.
"As it does, we can expect the property market to suffer as buyers can no longer afford to purchase at previous price thresholds, bringing house prices down in the process."
Homebuyers themselves were also left disheartened after the lack of support revealed in the budget today.
Taking to Twitter, @Ferial_Saada wrote: "So as a hard working person and not claiming benefits I will not get energy bill support and my mortgage has increase by £400 a month! How is this fair or how this is an incentive to work instead of being on benefits! The working class getting 0 help."
@LaraKeay said: "Not much good news on homeownership - only long term measures to bring inflation/interest rates down, so Truss/Kwarteng damage to mortgages remains. Stamp Duty reduction to be scrapped from April and those selling second properties will pay more in Capital Gains."
@cathleenc_ added: "Nothing on building new homes, nothing on helping people with crazy mortgages from the @Conservatives. Shameful. #AutumnStatement."
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