What does the mini-budget mean for the Bexley Borough housing market?

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In some ways the mini budget unveiled by newly appointed Chancellor Kwasi Kwarteng, looked positive for the housing market. When you delve into the details of it, and the long-term economic effects of the budget, you may find yourself feeling slightly conflicted at whether now is a good time to buy or sell your home.

This latest budget is based on the assumption that the tax cuts will produce positive economic growth.
How does it affect the housing market though? 

Stamp duty changes were one of the standout points from the mini budget. Most noticeably, for first time buyers there is a sizeable cut to stamp duty, meaning the limit is now almost double what it previously was. The new stamp duty threshold for first time buyers has increased to £425,000 from £250,000.  Additionally, those first-time buyers with a bigger budget, will be able to claim a tax relief on the first £625,000 of their new home.

This is a permanent move that will see approximately 200,000 home buyers that will no longer need to pay stamp duty. The stamp duty changes will also mean you will benefit if you are an existing homeowner looking to move. So, on a £400,000 house, a home mover will save £2,500.
The proposed change in stamp duty is designed to generate growth in the housing market by an estimated increase of 29,000 house moves per year. As well as supporting the housing industry, such as estate agents and builders. 

Although not yet announced, it is expected that in the future, planning reforms will be proposed as an additional solution to accelerate growth in the UK housing market.

This all sounds like a great step for supporting the whole housing industry and buyers.
Something else that influences the housing market is interest rates. In the past week the pound has plummeted, and the Bank of England has raised their interest rates from 1.75% to 2.25%, and they might not stop there.

These raises mean that any money saved from the stamp duty cut, could be swallowed up by mortgage repayments. The cost of a 5-year fixed-rate mortgage has nearly tripled in the past 12 months and looks to continue rising.

The immediate knock-on effect means that the banks’ lending is getting increasingly stringent, and buyers seem to be more cautious. Additionally, the housing market has been steadying over the past 6 months. These are not bad things though. We know house prices rise and fall, and with the market slowing down slightly, there’s more time for you to plan, and to not miss out on a home.

So overall, is it a good time to buy and sell your home? 

It’s a good time to talk to the experts and seek professional advice and guidance. Every buyer or seller is unique, and so while there is plenty of information online, talking to a professional provides you with advice based on your personal set of circumstances. Having all the information you need allows you to make informed decisions with professional help along the way.

Here at Ashton Reeves we are experts on the Bexley and Sidcup housing market, so you can be safe in the knowledge that you will be well looked after throughout the process of buying or selling your home.
Our agency takes pride in helping our clients with such a big moment in their lives.


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