Since the announcement of the Budget on 30 October, I’ve been thinking about what it means for the Plymouth housing market. One of the most direct effects will come from the changes to stamp duty. This is the tax that buyers have to pay when purchasing a new home, and is charged in bands, with rates based on existing property ownership. The average price of a home in Plymouth is £236,700. Assuming a buyer only owns one home, they will pay £2,234 more in tax on this house from March 2025 (when the bands change) compared with what they’d pay before the budget. When you consider that the value of an average home here increases by £8,995 each year, it’s unlikely to deter home movers in attractive markets like ours.
While there was nothing announced in the Chancellor’s Budget likely to stimulate the housing market directly, we must look at the wider economic context. UK mortgage approvals reached a two-year high in September, driven by anticipated interest rate cuts from the Bank of England. Approvals rose to 65,647, surpassing forecasts and marking the third consecutive monthly increase as lenders pre-emptively reduced mortgage rates. The big decision to increase the rate National Insurance paid by employers should have a deflationary effect and make interest rate reductions even more likely. However, inflation could rise as a result of the fiscal loosening caused by extra spending. It remains to be seen which will have the greater sway.
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