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Britain’s housing market has slowed following the recent budget, with RICS reporting new buyer enquiries dropping to -32% in November, the weakest level since September 2023. Much of the survey was completed after the government announced a planned annual tax on homes worth over £2 million, set to begin in April 2028. While the high threshold limits immediate impact, leaked budget details also dampened activity. RICS noted the market has struggled for momentum due to affordability pressures and high borrowing costs. House price readings improved slightly to -16%, suggesting moderate adjustments. Overall, demand remains cautious, especially for high-value properties.
Britain’s housing market has shown signs of slowing after the finance minister’s recent budget, according to the Royal Institution of Chartered Surveyors (RICS). The latest survey revealed that new buyer enquiries fell to -32% in November, down from -24% in October, marking the weakest level since September 2023. The drop reflects the fastest decline in over two years. Advertisement
Around three-quarters of the survey responses were recorded after the budget announcement, which included a planned annual tax on homes valued above 2 million pounds (USD 2.63 million). The tax is scheduled to come into effect in April 2028. Surveyors noted relief over the high threshold, which will limit the number of homeowners affected in the near term.
RICS highlighted that leaks of budget details during November had also contributed to the slowdown in market activity. Finance Minister Rachel Reeves described these leaks as unacceptable, emphasizing their potential impact on buyer confidence.
Simon Rubinsohn, RICS chief economist, explained that the housing market had been struggling for momentum for several months. He added that the recent budget measures were unlikely to produce a significant change, with fundamental challenges such as affordability issues and elevated borrowing costs expected to keep activity subdued in the near term.
The survey further showed a slight improvement in the house price indicator, which rose to -16% in November from -19% in October, reaching the highest reading since July. This suggests that while demand is slowing, price adjustments remain moderate rather than sharp. Analysts believe this reflects a market cautiously responding to tax measures, borrowing rates, and ongoing affordability constraints.
Overall, the survey indicates that UK property activity may continue to face pressure, particularly for high-value homes, but the market is not expected to experience a rapid downturn. Buyers and sellers are likely to remain cautious, balancing financial planning with the impact of tax changes and borrowing costs.
Source Reuters
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