The Autumn budget is coming up on the 30th of October, with people speculating that this will mean a rise in Capital Gains Tax.
Recent research has shown that there is a record high of former rental properties currently on the sales market. These levels are the highest in London, where nearly a third of properties up for sale have previously been available for rent.
SellHouseFast.co.uk wanted to take a deeper dive to find out if this is related to the Autumn budget, and the effect this may have on those hoping to sell or buy a house in the near future. CEO of TAB, Duncan Kreeger, spoke to SellHouseFast about what this means for the housing market, and provided predictions for who this will benefit in the coming months.
Duncan Kreeger comments:
“It’s certainly true that whispers of a potential capital gains tax hike have landlords reconsidering their portfolios.
“The idea of increased taxes on gains could severely cut into their profits, prompting many to cash in before the potential increase. Nearly 20% of homes on the market, having previously been rentals, suggests we’re seeing the start of a notable trend. But here’s the twist – this shakeup might just be the catalyst for some positive change in the housing market.”
What happens if landlords can’t sell before the increase?
“If landlords can’t sell before the capital gains tax increase, they’ll face a difficult choice. They may have to hold onto the property longer and endure higher taxes on their eventual gains.
“Alternatively, some may choose to rent their properties out longer-term, hoping that the rental income compensates for the tax hit. But, ultimately, those unable to sell in time could face reduced profits or potentially be forced into price cuts.”
How long is it likely to be before the increase is put in place?
“While speculation is rife, the key question is *when* the government will pull the trigger on this increase. It’s plausible that we’ll see it announced in the autumn budget, but the implementation might not be immediate.
“There could be a grace period before the changes come into force, giving landlords a few months to offload properties if they’re quick about it. If history is any indicator, the Treasury might give some warning – but I wouldn’t bet on a long window. For landlords, time is of the essence.”
How could this positively affect the market?
“First-time buyers could be the biggest winners here. With more properties hitting the market, particularly in high-demand areas like London, competition eases, and prices could adjust accordingly.
“Buyers who’ve been priced out by landlords snapping up properties for rental purposes may finally have their chance to secure a home. It’s a reshuffling of the deck, really – opening the door for those seeking to own, rather than rent. Moreover, it may lead to a boost in property diversity, where more homes are sold to private owners rather than remaining locked in rental portfolios.”
Who stands to benefit the most?
“Without a doubt, first-time buyers and owner-occupiers stand to gain the most. With landlords unloading properties, it could lower the barriers that have kept younger generations out of the market, especially in London.
“We’re also likely to see institutional buyers, like property funds or Build-to-Rent investors, potentially swooping in to snap up homes at competitive prices. And if landlords panic-sell, buyers who are ready and financed could find themselves in a strong negotiating position.”
Will this spread beyond London?
“London may be the key player now, but don’t be surprised if we see this ripple across the country. The capital tends to set the tone, and if the market there reacts strongly, other regions will follow.
“Landlords in cities like Manchester, Birmingham, or Bristol, where rental yields have been strong, might also choose to sell off their properties to avoid future tax increases. However, it’ll depend on local factors and how quickly the budget changes unfold.”
