Written by Claire Northmore, Director at Marchand Petit
After weeks of speculation, headlines, and carefully placed leaks, culminating in a last-minute leak that caught even seasoned observers off guard, the Autumn Budget has finally landed. For the South Devon housing market, the main story is, thankfully, one of stability rather than upheaval. Already this morning, we have seen busier phones and a pickup in online enquiries, and a quiet sense of relief, not unlike the hush after winter snow, is beginning to settle over buyers and sellers as certainty returns.
What it means for homeowners in South Devon
For all the noise around higher taxation, the Budget has thankfully stopped short of rewriting the rules of home ownership or challenging the long-standing idea that your home is, in many ways, your castle.
There are clear moves to raise revenue not only from wealth and investment, but increasingly from the incomes of working households, owner-managed businesses and private landlords, with inevitable knock-on pressure for both the rental market and the high streets that rely on local spending. Many households will feel that the tax burden is edging higher. However, the fundamentals that matter most to people living in their own homes remain broadly intact. For South Devon rental market, and particularly for high-value coastal locations, the outcome is still less far-reaching than many had been led to expect.
In short, after a period where rumour held the market back, we now have clarity. Buyers and sellers can once again make decisions based on known facts rather than speculation, and that alone is likely to provide a gentle but meaningful tailwind for the South Devon property market.
The key points in brief
From a housing perspective, the Budget can be summed up quite simply.
Stamp Duty is unchanged. The way property purchases are taxed in England and Northern Ireland remains the same, so buyers can plan with known numbers rather than waiting for yet another set of thresholds.
There is still no Capital Gains Tax on your main home. The long-standing relief on your principal residence remains in place, so selling the home you live in continues to sit outside the Capital Gains Tax regime.
At the very top end, a new High Value Council Tax Surcharge, due from 2028, will apply to homes worth over £2 million. Rachel Reeves has confirmed that this will start at £2,500 a year for properties above £2 million and rise on a sliding scale to £7,500 a year for homes worth over £5 million. It will affect higher-value properties across the country, including a number in South Devon, but it is less sweeping than many had feared.
Headline income tax rates on earnings have not been raised, but the picture is different for income from assets. From April 2027, separate higher rates will apply to property income across England, Wales and Northern Ireland, with basic, higher and additional property rates set at 22 per cent for basic-rate tax, 42 per cent for higher rate tax and 47 per cent for additional rate tax. For those who pay tax on savings income, the same 2 percentage point increase will take effect. This will be felt most by buy-to-let landlords and by anyone with significant taxable savings or investment income. Income tax thresholds are now frozen until 2030/31, which means more people will gradually drift into higher tax bands over time, tightening household budgets without directly altering how homes are taxed when they are bought or sold.
This is a Budget that reassures most owner occupiers more by what it does not do than by what it does. It stops short of imposing an annual charge on ordinary family homes or fundamentally changing the way main residences are treated.
South Devon in focus: what changes?
For the relatively small number of homes with values above £2 million, the surcharge becomes one more line to consider alongside council tax, maintenance and running costs. Crucially, the change is some years away, which gives owners time to plan rather than forcing rushed decisions.
At the upper end of the local market, including large waterfront houses, substantial village homes and discreet country properties, there may be a little more price sensitivity around the £2 million mark as the implementation date draws nearer. However, we expect to see continued interest from London, the home counties and international buyers who still see South Devon as offering depth of lifestyle and relative value compared with prime city postcodes, and this Autumn’s Budget is unlikely to disturb that principle for these sought-after, prime coastal and estuary homes in South Devon.
Plymouth, employment and long term investment
The Budget also sits against a wider economic backdrop that matters directly for South Devon homebuyers.
Plymouth has been singled out in the Budget documentation as one of four “early adopters” for the government’s new place-based business case approach, alongside Liverpool, Port Talbot and Birmingham. It is a technical phrase, but the signal is clear Plymouth is seen in Whitehall as a city where targeted public investment can underpin long term growth.
This recognition comes on top of substantial commitments that are already in train. There is significant additional investment planned over the next decade into HM Naval Base Devonport and Babcock’s Devonport Royal Dockyard, supporting the next phase of the Royal Navy’s submarine programme and operations extending well into the second half of the century. Defence and dockyard activity already accounts for a meaningful share of Plymouth’s economic output and employment, with further roles expected as new projects come forward. The Plymouth and South Devon Freeport is projected to bring major investment and jobs across Plymouth and the South Hams in advanced manufacturing, marine, defence and clean growth sectors.
For the Devon housing market, this matters because many buyers want to live in the South Hams and commute into Plymouth, combining village or coastal life with skilled work in the city. In an environment where higher taxes put pressure on both households and employers, long term commitments of this scale are an important source of confidence for Plymouth and, by extension, for South Devon.
Second homes, holiday lets and a market tilting towards main residences
The policy environment for second homes and holiday lets in South Devon has shifted decisively in recent years. Additional homes, including most second homes and buy to lets, attract a higher rate of Stamp Duty than main residences, which has impacted buyer demand. At the same time, the ability for councils to levy a 100 per cent council tax premium on second homes is no longer just theoretical. South Hams District Council has brought this in, effectively doubling the annual bill for second-home owners in the district. Set alongside higher running costs and the removal of several historic tax breaks, that change has already pushed a noticeable number of second homes onto the market.
The Furnished Holiday Lettings regime was abolished with effect from April 2025, bringing most holiday lets into line with the rules for other residential property and removing a range of tax advantages that previously favoured short-term letting over longer-term occupation. Taken together, these changes mean that second homes and holiday lets are now more heavily taxed than a few years ago.
For owners who have been trying to sell a second home without success or have seen their holiday letting returns in the South Hams drift down in recent years, it may be worth exploring the option of longer-term rental. Our Lettings Manager, Natasha Benfield, has many years of experience in the South Hams lettings market and can talk you through both the figures and the practicalities, including what the Renters Reform legislation is likely to mean for landlords. If you would like to explore this route, please contact Natasha on 01548 855599.
On the ground, the South Devon market is being increasingly anchored by people living and working here full-time and by those relocating to make South Devon their main home while working locally, commuting or working in a more flexible or hybrid way. Mainline rail connections from Plymouth and Totnes to London, Bristol, and other key cities mean that hybrid and weekly commuting is entirely feasible, and this is having a clear outward ripple effect. Homes within roughly a 30-minute drive of these stations, from village houses to family homes in well-connected rural spots, are attracting buyers who want a settled base in South Devon without severing ties to city-based careers.
In that context, employment and earnings matter more than ever for the South Devon housing market. The combination of major defence and marine investment in Plymouth, strong transport links to national employment centres and a policy environment that now clearly favours primary residences over second homes is gradually reshaping demand towards people who want to call South Devon home all year round.
Market sentiment: from pause to progress
Over recent months, it has often been the anticipation of change, rather than policy itself, that has acted as a brake on activity. Rumours of wide-ranging property taxes, mixed signals on Stamp Duty and talk of broader wealth levies led many potential buyers and sellers to adopt a wait-and-see approach. That caution has been particularly evident in higher-value transactions and lifestyle moves.
At the same time, after a period of strong outperformance, South West prices have eased back. Rural and coastal areas that saw some of the sharpest gains between 2020 and 2022 have, in many cases, seen their pandemic premium ease rather than continue to climb.
Moving forward, we are not expecting a sudden upswing in values as a direct result of this Budget. However, many forecasters still expect borrowing costs to ease gradually over the remainder of 2025 and into 2026. If that path broadly materialises, the encouraging forecast for our local housing market is likely to be a positive shift in momentum rather than a rise in prices. Even modestly lower mortgage rates can provide a useful boost to the housing market, widen the pool of proceedable buyers, make monthly payments feel more manageable, and give both upsizers and downsizers greater confidence about committing to their next move. Buyers now have a clearer sense of the tax landscape and sellers can calibrate pricing and timing without second guessing what the Chancellor might do next. My central expectation is that, as we move into early 2026, prices will remain broadly where they are, but activity levels will improve, with a healthier level of offers and agreed sales. That, in turn, should help to ease some of the stagnation we have seen over the past year, where many people who wanted to move to South Devon, or within the locality, have been frustrated by their inability to proceed until their own home had an agreed sale.
Why now is a smart moment to prepare for the Boxing Day bounce
The post-Christmas surge in activity is now a well-established feature of the housing market. Online searches and portal views jump sharply from Boxing Day onwards. The New Year market effectively begins in late December, not mid-January. Properties that are photographed, launched, and properly presented before Christmas are the ones that benefit from that first wave of motivated buyers.
With Budget uncertainty now removed, homeowners have an unusual advantage this year in the form of a clearer economic backdrop before the seasonal rush begins.
If you are considering a move in 2026, bringing your home to the market in late November or December means you are visible at the very moment buyers start planning their year and you avoid the congestion of a crowded spring launch.
Thinking about your next move, whatever your price point
Whether you are buying for the first time, trading up for more space, downsizing, or simply looking for a more energy efficient home to ease ongoing living costs, this is a sensible moment to take stock. With tax and household bills under pressure, many people are rethinking how and where they live. Shorter commutes, better insulation, modern heating and lower running costs are all moving up the wish list.
Across South Devon we are seeing strong interest in well designed, efficient homes, including new developments such as Collaton Park near Newton Ferrers and Green Park at Chillington. These schemes combine contemporary layouts with high specification finishes, modern building standards, warranties and significantly lower day to day maintenance than many older properties, all of which can make life simpler and more predictable, so it is not surprising that we expect this to be an ongoing trend for buyers into 2026. For more information on Marchand Petit New Homes, please contact our New Homes Manager, Kandi Shaw, on 01752 373405.
What this means for you
If you are a homeowner who is thinking of selling, the Budget has not introduced new barriers to selling your main home. The narrative has shifted from “what if” to “what now”, which tends to bring committed buyers back into the South Devon property market. Experience also shows that, whatever the wider economic backdrop, well located, accurately priced and carefully presented homes will generally attract buyer interest.
That demand is not limited to turnkey homes. Properties that need updating, including probate sales and houses requiring major renovation, continue to attract strong interest from buyers who want to create their own dream home or grand design. For some of these more complex or time sensitive sales, auction can provide a clear timetable and a high degree of certainty, particularly where a property has been on the market for some time or a previous method of sale has not delivered a result. Our Professional Department, headed by Chartered Surveyor Stuart Cartwright MRICS (01548 855590), is on hand to support with formal probate valuations and to advise on whether auction might be the most appropriate route to market. We have seen notable success this year in securing committed buyers for project houses via auction in cases where other agents and more traditional methods of sale have struggled to gain traction.
If you have been delaying a decision because of Budget noise, this is a natural moment to reassess. A confidential market appraisal can give you a clear view of value and likely demand ahead of the Boxing Day and New Year surge.
If you are wondering whether your home might be affected by the £2 million threshold, our Prime Waterfront and Country House Department offers a discreet, no obligation market appraisal service. Led by Director Helen Harris, the team specialises in valuing South Devon’s most desirable coastal, estuary and country homes and can provide a clear, evidence-based view of where your property sits in the current market. To arrange an appointment, please contact our Prime Waterfront and Country House Department on 01548 855590.
If you are a landlord or holiday let owner, higher tax on property income from 2027 will focus attention on net returns rather than headline rents. The removal of specific holiday let tax advantages reduces some of the benefits that short term lets previously enjoyed over standard rentals. Some investors may choose to streamline or rebalance their portfolios, which could release additional stock into the sales market over the next couple of years. For many landlords, the question will not be panic or exit, but a more measured review of which properties still earn their keep after tax and which might be better realised as capital.
Our outlook and how we can help
Seen through a South Devon lens, the Autumn Budget looks less like a dramatic turning point and more like a confirmation of the status quo, albeit with higher taxation at the margins.
Drawing on more than 25 years of working in the South Hams housing market, my view is that the underlying story here is one of resilience. This remains one of the most sought-after coastal areas in the country, with a depth of demand that has repeatedly carried the market through previous cycles of adjustment.
If you would like to understand how these changes sit alongside your own plans, obtain an up-to-date view of your home’s value, or position a South Devon property in front of London and national buyers in the most effective way, Marchand Petit would be pleased to help. You can reach me directly at our Newton Ferrers office on 01752 873311, or view your local office here.
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*This article is intended as a general overview and does not constitute personal tax advice. For guidance tailored to your circumstances, please speak to a qualified tax adviser or accountant.