The UK housing market is on the rise following the Autumn Budget announcement, defying previous concerns.
- Estate agents report increased sales in October, with many buyers eager to finalise deals before possible tax changes.
- Media coverage and reduced mortgage rates have contributed to a boost in market activity.
- Buyer inquiries have risen consistently for four months, coupled with more property listings.
- The market faces future challenges, including mortgage rate impacts from higher bond yields.
The UK housing market has shown remarkable resilience following the uncertainties surrounding the Autumn Budget, as reported by a Royal Institution of Chartered Surveyors (Rics) survey. Of the 269 estate agents surveyed, a majority noted a rise in sales during October compared to September, largely due to buyers looking to complete transactions ahead of anticipated tax adjustments. This sentiment counters the initial apprehensions felt by many in the market.
Agents have linked October’s increase in activity to intensive media coverage and the easing of mortgage rates. Simon Milledge of Jackson-Stops in Blandford Forum referenced a significant number of exchanges and completions motivated by buyers wishing to avoid budget-related tax changes. Similarly, John King from Andrew Scott Robertson cited that the dual effects of media influence and mortgage conditions played a role in driving the market.
Ian Perry from Perry Bishop in Cheltenham observed a brief lull in the weeks leading up to the budget but reported a revitalisation in market activity thereafter. Looking forward, 34% of estate agents expect to see a rise in home sales within three months, with optimism extending into the next year.
Recent trends indicate a positive trajectory in the housing market, with buyer inquiries continuously increasing over the past four months and a growth in new property listings. Such developments contribute to what Rics describes as a “relatively solid” short-term pipeline. The survey highlighted that 16% of respondents have noticed rising house prices, a shift from the previous perception of static pricing.
Tarrant Parsons, head of market analysis at Rics, noted the ongoing improvement in buyer demand translating into more sales agreements being reached. He anticipates that this positive trend will persist in the coming months. However, he also cautions that the post-budget rise in bond yields, affecting mortgage rates, could present short-term challenges.
In the rental sector, tenant demand remained strong over the summer months, despite growing supply constraints. A net 29% of letting agents experienced a drop in landlord instructions, marking the most negative reading since late 2021. This scarcity of rental homes is expected to keep driving rents upward, compounding the competitive pressures on tenants.
The housing market’s resilience post-budget highlights both a current upswing in activity and future challenges, influenced by mortgage rate dynamics.
