Budget 2024: Clarity will prompt busy prime market in Oxfordshire this winter

We knew in 2024 there would be a general election, there was confidence interest rates would fall and in September our new Government warned of a difficult Budget which has since been delivered.

With such sweeping changes to policy across the board, it remains to be seen what the immediate economic future will hold. Uncertainty experienced through the year has left the property market subdued.

In Oxford specifically, lack of certainty concerning the future has prompted indecision which has led to lower transaction volumes than we’d expect.

But this week’s Budget has provided clarity, something a lot of buyers – and sellers in equal measure – have been searching for. Consequently, the prospect of a busy winter and spring market is high and there are reasons why now is the right time to consider that dream move.

Top line changes

There is no getting away from the fact that this is a significant budget – changes to previous legislation clearly tells us this.

When breaking the outcomes down, here are the key take outs which will affect the property market in the short, medium and long term:

Stamp Duty Surcharge increase

Policy: Buyers who purchase an additional property are already subject to a higher stamp duty rate. From now, instead of paying an extra 3% in stamp duty fees, buyers will pay 5% of the value of their home. It means a property sold for £1m now carries a stamp duty surcharge of £50,000 instead of £30,000.

Forecast: In the short term, agreements on properties might be renegotiated – some could even fall through – but the impact on the bigger picture will be minimal. Although this move will make becoming a landlord less appealing for some, many will simply factor the additional stamp duty charge into the total purchase price.

Employer National Insurance contribution increase

Policy: The rate of National Insurance paid by employers will increase by 1.2% to 15% from April 2025.

Forecast: While not directly affecting employees’ payslips, this move is likely to stall the rate of wage increases as employers account for increased costs through either their staff or customers.

A long-term consequence of this is the possibility of the Bank of England reducing its bank rate over a longer period of time than originally anticipated, although many experts predict the rate will decrease from 5% when it is next reviewed on November 7.

Capital Gains Tax rates maintained

Policy: Capital Gains Tax rates on residential properties – including buy-to-let and second homes – will be maintained at 18% and 24%.

Forecast: Many predicted there would be increases to CGT rates on residential properties, forecasts of which did not materialise. This is a positive, and a case of as you were for sellers considering placing their homes on the market.

Other key takeouts from this week’s Budget include:

Non-dom tax relief abolished

For the first time in 225 years, foreign earnings from residents registered as non-domiciled will be accounted for in the inheritance tax system. While not hugely significant, this move could reduce demand from international buyers and investors across the UK’s prime markets.

Inheritance tax on agricultural land

Inheritance tax relief for farms is now limited to £1m, affecting approximately 70,000 farms across the UK. How this will impact the prime property market remains to be seen, however it is significant for Oxfordshire as three-quarters (74%) of the county’s land is indeed farmland.

In summary

On reflection, the 2024 Budget outcomes weren’t as bad as most people had anticipated.

Looking at new legislation as a buying agent representing clients searching for their dream home, we now have clarity (something which has been void for many months) which will act as a catalyst for people to get on with their lives and engage in the market.

We’ve previously discussed how our own research found the average length of time between buyers signing-up to our services in 2023-24 and completing on a property is 173 days.

That means if you want to receive the keys to you new home in time for summer 2025, now is the time to start your search. It is expected that the Bank of England will further reduce its base rate next week, providing another incentive for buyers to get the market moving.

It could be a busy winter and spring period for Oxfordshire’s prime property market.

Get in touch!

If you’re considering a move to Oxfordshire in 2025, drop our expert team a message today to learn more about how using the services of a buying agent can save you time and money and take the stress out of one of life’s most important decisions.

Call: 01865 553956

Email: info@oxfordpropertyconsulting.co.uk

We look forward to hearing from you!