With the Autumn Budget now just days away, uncertainty remains the defining characteristic of the UK’s economic landscape. Markets have been unsettled by a string of government reversals, unusually candid pre-Budget commentary from the Chancellor (leading to further reversals!), and competing briefings from across Westminster.
Rachel Reeves admittedly faces a formidable challenge: balancing fiscal discipline with pre-election pledges, whilst facing a sizeable deficit and shaky investor confidence.
For homeowners, landlords, and would-be buyers in Oxford, the stakes feel pretty high.
Here is a concise overview of the economic backdrop and the seven Budget areas most likely to impact the local property market.
The Economic Backdrop
It’s hard to claim the economic outlook is anything other than sluggish. Here are some key points that are currently defining it:
Growth Has Stalled
The UK continues to struggle with low or near-flatlined growth. GDP grew just 0.1% between July and September, a fragile uptick following a contraction in July. Business confidence remains muted, and unemployment has risen to 4.8%, its highest since spring 2021.
Inflation Remains Stubborn, But Has Finally Eased
Inflation held at 3.8% for three months from July to September. This had already offered some relief, given market predictions that it would have reached 4% again, but now – offering some rare positive news for the Chancellor as she prepares for next Wednesday – it has dropped to 3.6% in October. This could be a sign that inflation is set on a downward path at last, but nevertheless it remains above the Bank of England’s 2% target.
Interest Rates on Hold
The Bank of England maintained its base rate at 4% this month, in a narrow 5–4 vote. Some analysts believed the Chancellor’s earlier hints of income tax rises might nudge the MPC toward a cut before the New Year, but the recent U-turn on tax increases dampened those expectations. Nevertheless, a Reuters poll of market analysts revealed a consensus view that rates would be cut when the MPC meets on December 17, and given the announcement that inflation has at last fallen from 3.8% to 3.6% - despite steep increases in food prices – this becomes even more likely.
In the meantime, for those borrowers out there, average Standard Variable Rates remain above 7%, with typical fixed rates closer to 5%.
Bond Markets Cautious
Ten-year gilt yields have softened to around 4.1%, signalling a modest improvement in borrowing costs, though volatility continues to be a risk factor.
The Property Market: A Mixed Picture
House Prices Rising Slowly But Behind Inflation
Nationally, property values are around 2.4% higher than a year ago, indicating modest growth that nevertheless lags behind inflation.
Asking Prices Drop
Rightmove’s October index showed rising asking prices, but November brought a sharper-than-expected 1.8% fall, exceeding the usual seasonal dip. Asking prices aren’t the same as completed sales, but it is an unsettling trend.
Landlords Under Strain
Nearly four in ten landlords are said to be considering a full or partial exit from the market, according to a survey by specialist lender Landbay, reported in the Landlord Today magazine, with tax pressures, regulation, and rising costs chipping away at yields.
North–South Divide Widens
The disconnect between regions persists. Whilst parts of the North and Midlands are seeing growth, London and the South East have seen drops by as much as 10% in some areas.
Oxford’s Unique Position
Local ONS data shows that sold prices in Oxford have remained broadly flat over the past 12 months. Rightmove’s House Price Index, however, shows a fall in asking prices, around 10% year-on-year. It really demonstrates that many property listings are overpriced, with seller’s expectations running ambitiously ahead of what buyers are really willing to pay.
Seven Budget Areas Oxford Homeowners and Landlords Should Watch
With a focus on how the Budget might affect property matters, here are seven areas we believe homeowners, landlords and buyers should keep an eye on next week, especially here in Oxford.
1. Stamp Duty Overhaul
Speculation continues that stamp duty could be significantly reformed. Options reportedly under review include:
- replacing the one-off charge with an annual tax on high-value homes
- spreading payments over several years
- scrapping SDLT entirely in favour of land value taxes or higher council tax bands
Oxford, with an average sold price of around £502,000, would feel any such changes keenly. High-value regions like London, the South East, and Oxfordshire are likely targets for revenue-raising reforms.
2. Council Tax Revaluation and New Upper Bands
Council tax is based on 1991 valuations, and the Treasury is under growing pressure to modernise the system. The Budget may introduce:
- new, higher bands for premium properties
- adjustments to reflect up-to-date values
- more flexibility for local authorities
For many Oxford households, especially in North and Central Oxford, Summertown, Jericho and Headington, this could mean materially higher annual charges.
3. Capital Gains Tax Changes
While a full CGT charge on primary residences is unlikely, modifications to Principal Private Residence Relief have been floated. Options include:
- a gains threshold above which CGT is payable (e.g., £1.5m+)
- increased CGT rates
- lower tax-free allowances for investment property
Landlords looking to dispose of assets, or homeowners with high-value properties, should take note.
4. Income Tax, National Insurance and VAT
The widely expected income tax rises have been shelved… for now. In their place, the Chancellor may opt for “stealth taxes”, including:
- extended freezes to thresholds (“fiscal drag”)
- a possible uplift in VAT
- higher National Insurance contributions
- and, critically, NI applied to rental income, affecting around 360,000 landlords and reducing some yields by up to 10%
The fiscal gap remains large, and little is genuinely off the table.
5. Inheritance Tax and Other Wealth Taxes
Inheritance Tax could see tightened thresholds or higher rates, while broader wealth taxes may also be under consideration.
These measures would be designed to target the top end of the market, likely to affect Oxford more than many other regions.
6. Landlord Regulation and Renters’ Rights
The Renters’ Rights Act and Making Tax Digital will increase compliance burdens for landlords in the coming year. Budgets often include incentives or ‘sweeteners’, and this year that might include relief for insulation or green improvements, in an attempt to woo landlords to stay in the market in the face of tighter regulation, rising costs and squeezed margins.
Landlords reviewing portfolio strategy should watch closely for any transitional arrangements or new reliefs.
7. Mortgage Market Measures and Buyer Support
There is also speculation that the Chancellor may revisit mortgage support mechanisms, particularly for first-time buyers. Options reported in recent commentary include tweaks to guarantee schemes, adjustments to affordability assessments, or targeted assistance for low-deposit borrowers. While major intervention is unlikely, even modest adjustments can influence demand at the lower and middle ends of the market – and in a place like Oxford where affordability is a perennial issue for our younger buyers, this could spell some positive news.
Final Thoughts for Oxford Homeowners and Landlords
This is shaping up to be one of the most unpredictable Budgets in recent years. Policy U-turns, market sensitivity and political pressure create a volatile environment where even last-minute decisions can have material consequences.
For landlords, a combination of regulatory tightening and potential tax rises could reshape yield calculations. For homeowners, particularly in higher-value Oxford postcodes, changes to stamp duty, CGT or council tax could be financially significant.
At Cherry Picked Residential, we will stay tuned to every Budget development and bring you practical, local guidance, so stay tuned to our social media channels for any further updates. We will also be releasing a follow-up piece once the final details are known next Wednesday.
The market may move fast after next week’s Budget, and indeed it may well move unpredictably.
