The housing market isn’t actually broken. Not the way that you might assume it is from regular market commentary and even national and local news stories.
Nevertheless, it does feel far from relaxed.
The reality is that people continue to move home. Properties are selling to buyers who either come armed with cash or who have the ability to borrow; tenants continue to rent properties which, indeed, continue to be let out by private landlords, despite so much commentary hinting at the imminent collapse of the lettings sector, induced by the introduction of the Renters’ Rights Act.
But none of that is to suggest that things aren’t a little tricky. Barely a day goes by (in fact, perhaps not even a single day goes by) when I am not dealing with one issue or another in our business that is brought on by a concern, a misunderstanding or an outright effect of tougher market conditions, uncertainty, and changing legislative landscapes.
But it is, in the same breath, entirely evident that people continue to move for all the reasons they always have: work, relationships, growing families, schools, retirement and changing circumstances. They continue to do so, and they will continue to continue to do so.
But let’s examine what the data tells us. What exactly are we looking at?
Latest figures released by HMRC show seasonally adjusted residential transactions in August running around 2% below the same month last year. House price growth – often rather simplistically used as the barometer of whether the property market is healthy – has been subdued. The latest official UK House Price Index recorded annual growth of just 0.9% in August, down from 1.4% in July, both of which in any case are therefore below the prevailing rate of inflation. In real terms, it means that property values can be said to have fallen by comparison to the mean value of everything else, and also compared to wages, which – encouragingly – have grown.
And more recently, against a backdrop of rising mortgage rates and a continued or perhaps even a growing sense of uncertainty, there has been little sign of the traditional autumn bounce that the property market would normally hope to see at this time of year.
Rightmove’s October figures show asking prices rising by 1%, below the typical 1.3% October increase, with higher borrowing costs increasingly feeding through into buyer affordability.
Another statistic that is worth bearing in mind, as it captures the current economic mood, comes from Moneyfacts.
Mortgage products are currently available for just 13 days before being withdrawn or replaced.
This had dropped to as low as 8 days earlier this year, so that should be noted – but at the same time, we need to acknowledge that it is down from 14 days in September. Moneyfacts’ own commentary describes borrowers and brokers as navigating one of the most challenging mortgage markets in modern times. Swap rates have been moving quickly, and lenders have consequently been repricing products just as quickly.
And now, into this tableau, we have the Autumn Budget.
What do we know about what’s coming in the Budget 2026?
Next week, 28 October 2026, will see John Healey deliver his first Budget as Chancellor, and property has inevitably featured heavily in the speculation surrounding it.
We had heard suggestions of higher Capital Gains Tax, changes to the new high-value property surcharge – inevitably dubbed the “mansion tax” – Stamp Duty reform, further taxation affecting landlords and additional support for first-time buyers.
With a week to go, however, it now seems many of those possibilities have fallen away.
The Financial Times reported earlier this week that the Chancellor has ruled out an increase in Capital Gains Tax, although there has been no official government statement to confirm details of this.
He has also decided against reducing the threshold for the forthcoming high-value property surcharge from £2 million to £1.5 million – although, again, nothing has been confirmed formally.
Major Stamp Duty reform also appears unlikely. It has also been ruled out previously – but there was speculation following Kemi Badenoch’s Conservative Party Conference address, when she committed to abolishing stamp duty were she to become prime minister in the future, that the government might U-turn on this – a ‘rabbit out of the hat’ moment perhaps.
It seems unlikely. That may disappoint parts of the property industry. Transaction taxes do not stop people moving altogether, but they unquestionably add to the cost of doing so – particularly for people considering a discretionary move such as downsizing – and that can stifle the number of people who do consider moving at any one time.
If the ambition is to encourage greater mobility within the housing market, there is a legitimate discussion to be had about taxing the act of moving home – particularly as heavily as it is now.
For now, though, it does appear that discussion will have to wait.
Hope for first-time buyers
One significant housing announcement we do know is coming, and absolutely expect to hear more about next week, is the Your First Home scheme.
The Government has already confirmed this initiative will allow eligible first-time buyers purchasing new-build properties in England to do so with deposits potentially as low as 2.5%, supported by a government-backed equity loan of up to 20%.
The Budget is expected to provide the important detail: income limits, possibly regional property price caps, implementation dates and exactly how participating developers will contribute towards the scheme.
There is plenty to welcome in helping people who can afford monthly mortgage payments but struggle to accumulate a large deposit, but – as we have mentioned in a previous article – there are questions we have to ask about how far the benefit travels.
As currently proposed, Your First Home applies to new-build homes. That provides a direct stimulus to housebuilders, with Bellway already suggesting the scheme could increase its volumes by around 10%.
Nevertheless, supporting purchases of newly constructed homes is not quite the same thing as stimulating transactions throughout the existing housing market.
A first-time buyer purchasing an existing property is often what we need to kick-start a chain. They make their offer, the seller buys another property, that seller moves elsewhere, and several transactions may ultimately follow.
We don’t get that when a first-time buyer purchases a newly built home.
Your First Home may prove valuable, but its impact will depend heavily on the detail announced next week, and this is something we will be watching.
For landlords, no news may be good news
Landlords probably aren’t going into this Budget expecting a lot – but at least some of their fears may be assuaged, especially after several years of tax and regulatory change. Many would be happy to settle for some certainty.
The apparent decision not to increase Capital Gains Tax will be welcomed by property investors considering selling assets, while the absence, so far, of another major landlord-specific tax measure may come as something of a relief.
That doesn’t mean the environment for landlords is suddenly going to become easier – although, I would say, that stability itself also brings a value of its own.
Which brings us to what may ultimately prove to be the most important property story of this Budget.
The most important housing announcement might not concern housing at all
The Chancellor can’t stand at the dispatch box and instruct lenders to reduce their mortgage rates.
But what happens in Westminster on 28 October might just influence the conditions in which mortgages are priced.
Fixed mortgage rates are influenced heavily by swap rates and lenders’ own funding costs. Those, in turn, are affected by expectations around inflation, future interest rates and government borrowing.
Financial-market confidence is important. Healey himself has repeatedly stressed fiscal discipline ahead of the Budget – something that should surprise nobody. And notably, as the FT reports, any new measures are expected to be paid for through taxation or spending decisions rather than additional borrowing.
Reuters’ analysis identifies gilt-market confidence as one of the principal tests the Chancellor faces next week – and it is probably also time to mention the most recent inflation announcement, which has seen that figure rise again, to 3.5%.
All that being said, the broader message coming from the Treasury appears to be one of caution rather than radicalism. We could call the approach “steady as she goes.”
And for the property market, that might not be a bad thing at all.
Because a market in which mortgage products currently have an average shelf life of just 13 days does speak of uncertainty. What it needs is a bit of stability, because with stability comes confidence.
Confidence from buyers that the mortgage they can afford today will still broadly resemble the mortgage available next month.
Confidence from sellers that there are buyers able and willing to proceed.
Confidence from landlords and investors that the rules will not continually change underneath them.
Confidence from financial markets that the Government has its sums under control.
Nobody in this industry seriously expects John Healey to fix the housing market in one Budget – anyone who says otherwise is either fooling themselves, or trying to fool you.
That does not mean we won’t, as an industry, hope and expect to see a plan forming in the fiscal decisions presented next Wednesday.
A final thought
I will conclude by referring back to my opening statement. Properties are still selling and being let out, and affordability, whilst no doubt stretched, is still being met. But activity is reduced and mortgage rates have been rising, which exerts pressure on the market, and on top of that, the normal autumn boost has been muted.
Ultimately, the housing market should be careful what it wishes for next Wednesday.
A dramatic rabbit from the hat might grab the headlines – but a credible, sensible Budget, followed by a calmly enthusiastic response from financial markets leading to a bit of stability in mortgage pricing, could ultimately prove to be considerably more valuable.
If that creates an environment for mortgage rates to then begin to move back in the other direction, better still.
Sometimes, “steady as she goes” is exactly what this market needs.