What the 2025 Budget Means for you

We know that sifting through a 200-page government report probably isn’t how you want to spend your morning! So, we’ve poured over the OBR’s latest Economic and Fiscal Outlook released this November to figure out exactly what it means for us here in Poole.

While the economy is generally stabilizing, there are a few new changes aimed at higher-value homes and landlords that will definitely spark some dinner party conversations in Canford Cliffs.

Here is the friendly breakdown of what you need to know.

1. Got a home over £2m? There’s a new charge coming.

If you live in one of the larger detached homes in the area, this is the big headline. The government has announced a new "High Value Council Tax Surcharge" kicking in from April 2028.

It’s an extra annual charge that sits on top of your normal council tax for residential properties valued over £2 million.

• The cost: It works in bands. If your home is worth between £2m and £2.5m, the surcharge is £2,500 a year. For the super-prime homes over £5m, it goes up to £7,500.

• Our take: We suspect we’ll see a lot of properties priced strategically just under that £2m mark to avoid the threshold.

2. A bit of a squeeze for Landlords

If you have a buy-to-let portfolio or a holiday rental, the tax landscape is getting a little tighter.

Starting April 2027, the tax rates on property income are going up by 2 percentage points. This pushes the basic rate to 22%, the higher rate to 42%, and the additional rate to 47%. The OBR thinks this might lead to fewer rental properties on the market over the long run as profits get squeezed.

3. House prices: Slow and steady wins the race

After a rollercoaster few years, things look like they are settling down. The forecast predicts house prices will grow by just under 3% in 2025 and then settle into a steady rhythm of about 2.5% a year from 2026.

It’s not the boom times of the past, but steady growth is good for stability. We are also expecting to see more property transactions happening over the next few years as confidence returns.

4. The "New Normal" for Mortgages

We are often asked if the ultra-low interest rates of the 2010s are coming back. According to this forecast... probably not.

Markets expect the Bank of England base rate to dip slightly to 3.6% next year, but then drift back up to around 4% by 2030. For those remortgaging, the average rate on existing mortgages is actually predicted to tick up slowly to 5% by 2029 as older, cheaper deals expire. If you’re a cash buyer (as many in Canford Cliffs are), this doesn't change much, but for everyone else, it’s worth factoring in.

5. A few other things to watch

• The "Fiscal Drag": The freeze on income tax thresholds has been extended again until 2031. As earnings rise, this quietly pulls more people into higher tax brackets.

• Electric Vehicles: Driving an EV? From April 2028, there’s a new mileage-based charge coming. For an average EV driver, it’ll likely cost around £255 a year.

The Bottom Line?

There is no denying there are some extra costs on the horizon for premium property owners. But let’s be honest—Canford Cliffs operates in a bit of a bubble. The lifestyle, the beaches, and the community here are hard to replicate, and that usually keeps our local market resilient, regardless of what’s happening in Westminster.

If you are wondering how these changes specifically affect your home’s value or your rental portfolio, pop in for a chat. We’re always happy to help!