The Spring Statement and what it means for your Wiltshire Property

Wednesday was Spring Statement Day, and whilst we are told that these are very much not a ‘Fiscal Event’, there was still plenty of anticipation about what might be said and where it looks like we might all be headed.

Here is our House Group take on some of the key points from the Spring Statement, and how you as a Wiltshire resident might be affected when it comes to the housing market…

Cuts, Taxes and Affordability

Although Wednesday’s Spring Statement was very much billed as being ‘not a Fiscal Event’, the narrative coming from Westminster over the preceding days and weeks had paved the way for cuts to public spending.

Rachel Reeves cited that ‘the world is a different place’ today than in October, as benefits cuts were ushered in, mainly affecting individuals and families receiving personal independence payments (or ‘PIP’s).

3.2 million families are due to be affected, and here in Wiltshire, where towns like Swindon, Devizes and Chippenham support larger number of claimants, there could be some a knock on effect – unless, of course, the purpose behind cutting the PIP is borne out, and those affected do manage to find their way back into work. That will remain to be seen.

The big difference in the world that Reeves didn’t utter aloud, but was referring to, is that the USA now has a Trump government, and his threat of tariffs is likely to reduce GDP and treasury income (and indeed, a mere few hours later the same day, 25% tariffs on automobile imports into the USA was announced). Having previously pledged not to increase taxes on working people, it felt inevitable that public spending cuts would be on the agenda.

The government did stick to that prior pledge on taxes – there were no tax rises ‘for working people’ announced on Wednesday –, but of course employers’ National Insurance does go up in April, as announced in October’s Budget address.

It is inevitable that the added burden on employers will be felt be employees, manifesting itself in reduced hours, delayed pay rises, and perhaps even redundancies and lay-offs. At the same time, businesses facing extra costs will undoubtedly raise prices, fuelling (don’t we love it?) inflation.

All of which has an impact on general affordability – and that includes the affordability of property buyers.

Planning Reform and Housebuilding

The government pledged to build 1.5 million new homes over the course of this five year parliament, and the reforms to the National Planning Policy Framework (NPPF) and a modernisation of Green Belt policies is perhaps set to make this a ‘near miss’… which is miles closer than successive governments have come since the late 1960s.

It is estimated that we will see around 1.3 million new homes built in the UK over the period – and of course, Wiltshire may well see a good chunk of that, with large tracts of land highlighted for development potential in the most recent local plan, and with such good infrastructure and transport links making our county accessible. Any loosening of planning restrictions – or a cutting of the bureaucratic ‘red tape’, which it is being slated as – will only help to ease large planning applications through.

At the same time, Reeves used her Spring Statement to pledge an extra £2billion boost to building affordable properties, to further push this housebuilding agenda.

It is easy to take these things with a pinch of salt – but, in this case, the Office for Budget Responsibility (OBR) – an independent body that reviews government spending policies – has supported the claim, and has forecast that this housebuilding initiative will benefit the economy by adding 0.2% to GDP on its own – an economic boost of almost £7billion.

What does this mean for the property market? It means a modest increase in property values for a start, which the OBR says will rise by 2.8% in 2025, then by 2.5% per year until levelling off and dropping a little – 0.8% – in 2029. By this point, housebuilding volume should start to impact property stock levels actually available – and that goes for Wiltshire and the general South West region too.

The OBR also predicts a large increase in the volume property transactions, from 290,000 per quarter to 370,000 per quarter – an increase of 320,000 property sales per year – and again, if we do see large developments go through planning and construction here, we will certainly start to feel this effect in the Wiltshire property market.

Meanwhile however, mortgage rates are set to rise again, with the average mortgage rate peaking at 4.7% in 2028, and remaining the same until 2030. This is likely to affect the amount that households save – currently 6.25% of disposable incomes, but likely to fall to 3.35% by 2030. From a house buying perspective, this could mean less into deposits, which would tie in with the levelling off or potential decrease of property values by the end of this decade.

I’m thinking of selling my home in Wiltshire – should I do it now, or wait?

The economic climate always plays its part in the way the property market performs’. Not only are the two things inextricably linked, but the property market in itself is a major economic driver. Generally speaking, when the property market does well, the overall economy looks healthy – and that is why the lubrication of the planning and housebuilding system is quite exciting, from a market point of view.

It is also generally seen as positive for home ownership prospects, as more availability of property will slow down property price rises moving forward.

But we are not there yet.

The question of whether to move house in Wiltshire now, or whether to wait, should – we think – come down to your personal preferences.

The market today is a little fragile, but overall it feels like it is coming out on the other side from what have been more uncertain times.

Currently, we are looking at stabilising mortgage rates, and these are likely to be a bit higher in another couple of years – so that could be worth bearing in mind, considering the average property value in Wiltshire is just over £330,000, according to ONS data, compared to £265,000 nationally.

But realistically, the sort of property price growth being forecast over the next few years – 2.8%, 2.5%, 2.5%, 2.5% - is not very different from where inflation might be anyway. By and large there is not an obvious ‘value’ reason to move now, or in the next few years.

So let it be about purpose. Why do you want to move? What aren’t you getting from your current home? How will a move benefit you? Where will be the right location for you for this next period of your life?

These are all the questions we ask when we are discussing values with our sellers. Yes, we can help with bricks-and-mortar ‘value’ – and if you would like to know what your house is worth, click here for our Members Page.

But helping people understand the value to them in moving to one place or another place, led by their motivations and needs, that is the true delight in doing what we do.