LONDON (Reuters) -Britain’s housing market lost steam last month as demand faded from buyers concerned about possible tax increases in finance minister Rachel Reeves’ budget on November 26, a survey showed on Thursday.
The Royal Institution of Chartered Surveyors’ measure of new buyer enquiries fell to a net balance of -24 in October, down from -21 in September.
It was the weakest reading since April when Britain lowered the price threshold at which homebuyers become liable to pay the property purchase tax known as stamp duty.
A gauge of agreed home sales also dropped further into negative territory to -24 from -17 in September.
“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,” Tarrant Parsons, RICS’ head of market research and analysis, said.
“Greater clarity over housing taxation policy may help stabilise sentiment, but if the measures announced add further pressure to activity, they risk deepening the current slowdown.”
The increase in British property prices has been slower this year than in the second half of 2024 as concerns about the economy and the prospect of additional taxes on homes as Reeves readies her budget.
RICS’ house price balance, which measures the difference between the percentage of surveyors seeing rises and falls in house prices, fell to -19 in October from -17 in September.
Data from mortgage lender Halifax published last week showed that prices rose by 0.6% in October alone, pushing annual house price inflation up to 19%. Rival lender Nationwide reported a 0.3% monthly increase and 2.4% rise in annual terms.
RICS survey respondents broadly expected house prices to fall in the next three months, although they see prices largely in positive territory in the year ahead.
(Reporting by Suban Abdulla, editing by Andy Bruce)
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