UK Housing Market Slows as Buyers Worry Before Budget Announcement

Post by : Sameer Saifi

Britain’s housing market has slowed down in October as more people hesitate to buy homes due to fears of new taxes that might be announced in the upcoming budget. According to a new survey by the Royal Institution of Chartered Surveyors (RICS), fewer buyers are showing interest in purchasing houses as they wait to see what changes the government will make later this month.

The report, released on Thursday, showed that the number of new buyer enquiries dropped to a net balance of -24 in October, down from -21 in September. This means that more property agents reported a decline in interest from potential buyers. It was the weakest figure since April when the government changed the rules for stamp duty — a tax people pay when buying property.

RICS also found that home sales have gone down further. The measure for agreed sales fell from -17 to -24, showing that fewer deals were completed. This slowdown comes just weeks before Finance Minister Rachel Reeves is expected to announce the government’s new budget on November 26.

Experts say that many people are waiting to understand whether the budget will include higher property taxes or other measures that could make buying a home more expensive. “Ongoing uncertainty surrounding potential measures in the upcoming Budget are thought to be compounding the cautious mood among both buyers and sellers,” said Tarrant Parsons, RICS’ head of market research and analysis.

He added that other factors, such as high inflation and rising unemployment, are also affecting confidence in the housing market. “Greater clarity over housing taxation policy may help stabilise sentiment, but if the measures announced add further pressure to activity, they risk deepening the current slowdown,” Parsons said.

Over the past year, the rise in British house prices has already slowed compared to 2024. Many homeowners are now finding it harder to sell, and buyers are becoming more careful with their spending as the cost of living remains high.

According to the survey, the RICS house price balance — which measures the difference between the percentage of surveyors who see prices going up and those who see them going down — fell to -19 in October from -17 in September. This suggests that more surveyors are now reporting price declines.

Despite this, other data from mortgage lenders show mixed signals. Halifax, one of the UK’s biggest lenders, reported last week that average house prices rose by 0.6% in October, which pushed annual price growth to 1.9%. Another lender, Nationwide, reported a smaller 0.3% rise in monthly prices and a 2.4% increase over the past year.

These differences show that while national averages might look stable, local housing markets are facing pressure. Many buyers are waiting to see how the government’s budget might affect property taxes, mortgage rates, and economic stability before making big financial decisions.

Property experts say that the next few months will be important for the housing sector. If the government raises taxes on property or fails to bring inflation under control, home sales could slow even further. However, if there are incentives for first-time buyers or tax reliefs for homeowners, confidence could improve.

RICS survey participants expect house prices to decline in the short term, with most predicting weaker demand over the next three months. But many believe prices could rise slightly in the year ahead if the economy stabilises and mortgage rates fall.

Overall, the survey paints a picture of a housing market that is nervous and waiting. Both buyers and sellers are watching the government closely, hoping that the new budget will bring more certainty rather than more challenges.

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