-
Home
- Blog
Latest news and information
- Details
- Hits: 437
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.
- Details
- Hits: 2937
Is It Time to Extend the Stamp Duty Holiday? We say YES!
By Ajay Kumar, Managing Director, Cherry Picked Residential
After a year that saw the Oxford property market go through a series of peaks and troughs, Oxford is now firmly experiencing a mini-boom. It's fantastic to see properties in the city and in Wantage, Abingdon, Aylesbury and Bicester being brought to market and sold so quickly.
Much of this upturn in the Oxford property sector is down to the Stamp Duty holiday announced by Chancellor Rishi Sunak back in July 2020 to help stimulate the market during the ongoing COVID-19 pandemic.
Essentially, the Stamp Duty holiday, which runs until the end of March, means that Stamp Duty isn’t triggered on residential property up to the value of £500,000. So, the first £500,000 of any property purchase is exempt from the tax. For the past few months, this has been saving Oxfordshire buyers up to £15,000.
And what a break this has been for those wanting to buy a new home in Oxford – not to mention a great shot in the arm for the property market! We have seen our house sales pipeline increase considerably, and this is backed up by data from the Rightmove property website:
“Sold prices in Oxford over the last year were 11% up on the previous year and 7% up on the 2018 peak of £510,855”.
These are undoubtedly absolutely fantastic figures. But there’s a problem. And it’s a significant one.
The temporary Stamp Duty holiday is set to come to an end on the 31st March.
With pandemic restrictions continuing there have been calls to extend the Stamp Duty holiday. Yet, despite an online petition being signed by more than 116,000 people and therefore meeting the requirements for it to be discussed in Parliament, Leader of the House Jacob Rees-Mogg has disappointingly suspended the use of Westminster Hall, which is where debates on petitions like this are held.
The petition calls for the Stamp Duty holiday to be extended for an additional six months to help buyers looking to move and help stabilise the housing market.
Because the petition was signed by more than 100,000 people, the Government had to respond, and this is what they said:
“The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The Government does not plan to extend this temporary relief.”
At Cherry Picked Residential, we whole-heartedly agree with the petition and have indeed signed it. We disagree that the Stamp Duty holiday should end in a few months, quite simply because an extension would be an incredible boost for the property sector and the broader economy.
We are calling for a rethink.
The effect on home-movers in Oxford is plain to see. We have heard from many clients, particularly those reliant on factors other than property chains, such as those looking to move into a new build, who said:
“I am looking to move into a new build which is currently due to complete at the start of March 2021. If this build is delayed past 31st March 2021 and does not complete, then I will not be able to afford the additional cost of the Stamp Duty, so will not be able to afford the house.”
The significance of the end of the Stamp Duty holiday is worrying too for those in Oxford with purchases delayed through no fault of their own, for example, due to conveyancing hold-ups.
Should the Stamp Duty holiday end, we are likely to hear the sound of the economy stalling. And not one of us wants that to happen.
Currently, there are many instances of personal circumstances where vendors are in a position where they have to sell – which is why it's a good thing that the property industry has been allowed to remain open. By staying open, we are supporting the local economy, but of course, it’s a fine line as we must ensure our clients' health as a priority.
Estate agents up and down the country are following the guidelines and operating in a COVID-safe fashion. We practice social distancing, sanitise (or wear gloves) and wear masks, as well as ensuring all potential buyers follow the strict guidelines, whilst make sure viewings are by appointment only.
We try to make sure that viewings are by those who are ready to move so that we reduce the number of people on the roads and don’t carry out unnecessary viewings.
The estate agency business is mostly a responsible industry made up of fantastic property professionals just like us, who put our clients first, do a great job and get people moving.
So, at Cherry Picked Residential, here’s our view;
“We believe that an extension to the current stamp duty relief would allow essential transactions to continue and sustain buoyancy in the local market, particularly for those where personal circumstances require them to sell. The industry is under increasing pressure with existing transactions meeting the current deadline whilst anchoring property prices until a decision is announced.”
There is no doubt, in our opinion, that the Stamp Duty holiday has helped Oxford’s property market boom. Oxfordshire has a resilient property market and as seen in previous times will persevere and can even flourish. By taking this relief away the impact may slow the property market but the effect on the wider economy will be greater felt.
We need the momentum to continue as we move into spring. The Oxford economy and the wider national economy needs it.
We believe that estate agents can operate in such a way as to support it, playing our part in the success stories that we all need to hear.
And it’s not just us. Other sectors are rooting for the Stamp Duty holiday to be extended too. Conveyancers are seeing unprecedented amounts of work, but it’s potentially challenging for them to meet the 31st March deadline for movers because so many offices are closed, and land searches are taking longer than usual to complete.
While it’s unlikely that if an extension is announced by the Chancellor, it will not be infinite, even a short extension will allow more people to take advantage of the substantial saving and keep the Oxford housing market buoyant into spring and beyond.
