Executive Summary
- The Royal Institution of Chartered Surveyors (RICS) reported a slowdown in the UK housing market for October.
- New buyer enquiries fell to a net balance of -24, the lowest since April, amid concerns over potential tax hikes in the upcoming budget.
- Agreed sales also declined, while surveyors expect prices to fall in the short term but recover within the next year.
Britain’s housing market showed signs of cooling in October as new buyer demand declined amid concerns over potential tax increases in the upcoming budget, according to a monthly survey from the Royal Institution of Chartered Surveyors (RICS). The report highlights a cautious mood among both buyers and sellers, contributing to a slowdown in market activity.
Key Metrics Weaken
The survey’s measure for new buyer enquiries dropped to a net balance of -24 in October, down from -21 in September and marking the weakest reading since April. This coincided with a change in the stamp duty threshold, a property purchase tax. Similarly, the gauge for agreed home sales fell further to a net balance of -24 from -17 in the previous month.
Economic Pressures and Budget Concerns
According to Tarrant Parsons, RICS’ head of market research and analysis, the slowdown is being compounded by several factors. “Ongoing uncertainty surrounding potential measures in the upcoming Budget are thought to be compounding the cautious mood among both buyers and sellers, while above target inflation and rising unemployment are also a negative for the market,” Parsons stated. He suggested that greater clarity on housing taxation policy could help stabilize sentiment.
Contrasting Price Data
While the RICS house price balance, which measures the difference in surveyors seeing price rises versus falls, dipped to -19, other market indicators presented a different picture. Recent data from mortgage lender Halifax showed a 19% annual increase in house prices, while rival lender Nationwide reported a 2.4% rise in annual terms. This suggests a complex market with varying trends depending on the data source.
Future Outlook
Looking ahead, RICS survey respondents anticipate that house prices will likely fall over the next three months. However, the outlook for the coming year remains more optimistic, with surveyors expecting prices to be in largely positive territory over a 12-month horizon.
