The housing market is recovering after the budget as consumer demand increases
The UK housing market showed unexpected resilience in October, with estate agents reporting increased sales, increased consumer enquiries, and a brighter outlook following the Autumn Budget.
Despite pre-budget fears, the housing market has outperformed expectations, according to the latest survey by the Royal Institution of Chartered Surveyors (Rics). Of the 269 real estate agents polled, most reported more sales in October compared to September, driven by buyers looking to complete transactions before budget-related tax changes.
While some agents saw a downturn in the weeks leading up to the October 30 budget, the mood was optimistic. “We’ve had a wave of trades and liquidations, possibly driven by a desire to trade ahead of budget,” said Simon Milledge of Jackson-Sops at Blandford Forum, Dorset.
Similarly, John King of Andrew Scott Robertson in Merton, south-west London, says the increase in activity in October is a combination of media coverage of possible tax increases and reductions in mortgage rates.
Ian Perry of Perry Bishop in Cheltenham, Gloucestershire, commented: “[There was] little break before the budget but the market [is] now he’s doing it again.”
Looking ahead, 34 percent of real estate agents expected to sell more homes within three months, with more confidence about activity levels this coming year.
The survey also found a steady increase in consumer inquiries for the fourth consecutive month, coupled with an increase in new listings, creating what the Rics described as a “relatively strong trend” for the near term. Reflecting this recovery, 16 percent of respondents believe home prices are rising, a marked change from two months ago when prices were seen as flat.
Tarrant Parsons, head of market analysis at Rics, highlighted the momentum: “Recent developments in consumer demand are translating into increased sales volume. Looking ahead points to this bright trend continuing in the coming months.”
However, he warned that the post-budget increase in bond yields, which has an impact on mortgage rates, may pose challenges in the short term.
In the lettings market, tenant demand has remained strong over the summer, but supply constraints have become stronger. A total of 29 per cent of letting agents reported a drop in landlord orders, marking the worst reading since late 2021.
With rental homes in short supply, many agents expected rents—already at record highs—to continue to rise, further squeezing renters in a highly competitive market.
