Following the recent Autumn Budget, the UK housing market is showing signs of recovery.
- An increase in buyer demand has been reported by a majority of estate agents, with October showing more sales than September.
- Media attention on potential tax changes and easing mortgage rates propelled this boost in activity.
- A continuation of the rise in buyer inquiries and new listings has been observed, paving the way for a stable market.
- Despite the improvement, rising bond yields post-budget may present short-term challenges for mortgage rates.
The UK housing market has shown resilience following the Autumn Budget, defying prior concerns from industry experts. According to the Royal Institution of Chartered Surveyors (Rics), a recent survey indicated that many estate agents reported a rise in sales during October compared to the previous month. This was partly due to buyers eager to complete purchases before potential budget-related tax amendments could be set in motion.
Simon Milledge from Jackson-Stops in Dorset noted a significant increase in exchanges and completions around the time of the budget. Meanwhile, John King from Andrew Scott Robertson in southwest London remarked on the role of media discussions about potential tax hikes and favourable changes in mortgage rates in driving this surge in market activity.
Furthermore, there is an ongoing upward trend in buyer inquiries, marking the fourth straight month of growth alongside an increase in new property listings. Rics described this situation as a “relatively solid” pipeline, showcasing growing confidence in the housing market’s short-term prospects.
Additionally, 34% of surveyed estate agents anticipated a rise in home sales in the coming quarter, with optimism extending to expectations for next year’s activity. There was also an evident shift in house price trends, as 16% of respondents observed a rise in prices, in contrast to the static figures reported two months prior.
Tarrant Parsons, head of market analysis at Rics, remarked that the observed increase in buyer demand is resulting in more agreed sales, displaying a positive trend likely to persist. However, he issued a warning on the potential rise in bond yields post-budget, which could impact mortgage rates negatively in the near future.
In the lettings sector, tenant demand remained robust over the summer despite the increasing challenges in supply. A net 29% of letting agents reported fewer instructions from landlords, reaching the lowest point since late 2021. The resultant scarcity is causing rents, already high, to climb further, putting additional pressure on tenants in an already competitive market.
The UK housing market is showing a promising recovery post-budget, despite some potential hurdles.
