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Britain's housing market has slowed for the third consecutive month, with buyer demand and agreed sales staying negative. Uncertainty over finance minister Rachel Reeves' upcoming budget is adding to cautious sentiment across both property and business sectors. Landlords are offering fewer rental properties due to higher costs and proposed tenant rights legislation, while rents are expected to rise by around 3% in the coming year. Surveys also show businesses facing growing tax pressures and weakening confidence, reflecting broader economic challenges as the UK prepares for the November budget.
Britain's housing market has been slowing for a third consecutive month, with buyer demand and agreed sales remaining in negative territory. Analysts point to growing uncertainty over finance minister Rachel Reeves' upcoming budget as a key reason for the cautious sentiment in both property and business sectors. Advertisement
The Royal Institution of Chartered Surveyors (RICS) reported that buyer interest and transactions were steady in their negative trend through September, similar to July and August. The RICS house price balance, which measures the difference between surveyors seeing price rises and falls, showed a slight improvement to -15 from -18 in August. Tarrant Parsons, RICS' head of market research and analysis, said there is a broad sense of hesitancy in the market, reinforced by uncertainty about potential measures in the forthcoming budget.
Reports suggest Reeves may raise taxes in her late-November budget to stay on track with public finance targets, with the housing market potentially being a focus for extra revenue. Economists also noted that Halifax's unexpected drop in house prices for September highlighted concerns among buyers.
The rental market is also feeling pressure. RICS data shows that the number of landlords offering properties fell to the lowest point since May 2020, while tenant demand remained stable. Rising borrowing costs, ongoing maintenance expenses, and worries over planned legislation giving tenants more rights have prompted landlords to reduce supply. This shortage is expected to push rents up by around 3% over the next year.
A separate survey by the Institute of Chartered Accountants in England and Wales (ICAEW) revealed that business confidence dropped to a three-year low during the July-to-September period. Around 60% of businesses said the growing tax burden is a major concern. Suren Thiru, ICAEW's economics director, noted that employers continue to feel the effects of Reeves' previous decision to raise social security contributions. He added that falling confidence, coupled with weaker domestic sales and employment outlooks, may hinder the economy's ability to generate the growth needed to ease future budget pressures.
Overall, both housing and business sectors appear to be preparing for higher taxes and tighter regulations. Reduced housing transactions, limited rental supply, and declining business confidence underline the challenges facing the UK economy, highlighting the importance of cautious planning for households, landlords, and companies in the months ahead.
Source Reuters
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