Buyer numbers are rising at their fastest pace in three years
Recent data from the Royal Institute of Chartered Surveyors (RICS) reveals an encouraging shift in the UK housing market. Buyer numbers are rising at their fastest pace in three years, alongside an increase in sales agreements and property listings, indicative of a market gaining momentum.
The August survey by RICS identifies a positive shift, influenced mainly by a recent dip in mortgage rates. This dip has invigorated buyer interest and prompted estate agents and surveyors to anticipate further growth as we head towards the end of the year.
House prices on the rise
After nearly two years of decline, house prices are beginning to show signs of recovery. Most survey respondents predict a steady price increase over the next three months, reflecting improved sentiment among buyers. The modest drop in mortgage rates has been a key driver of this renewed enthusiasm, enabling more buyers to consider stepping onto or moving up the property ladder. This newfound optimism, however, is tempered by uncertainty surrounding the upcoming Autumn Budget and potential interest rate adjustments.
Anticipated budget impacts
The Labour government has hinted at challenging decisions in the forthcoming Budget, with speculation rife about possible tax increases set to be announced by Chancellor Rachel Reeves on 30 October. While commitments have been made not to adjust Income Tax, VAT, or National Insurance, there is potential for hikes in other areas, such as Capital Gains Tax, Inheritance Tax, and Stamp Duty. These changes will impact the housing market by influencing buying and selling behaviours.
Growing buyer interest
The RICS survey highlights a marked rise in potential home buyers, with a net balance of +15 respondents noting increased interest—a significant jump from +4 in July and a negative balance in June. This uptick is attributed to the Bank of England’s recent rate cut, which has boosted buyer confidence by suggesting an easing financial landscape in the coming months. Consequently, many buyers feel more equipped to make property investments, contributing to this period of buoyant market activity.
Supply side improvements
On the supply side, there has been a modest increase in new property listings, with RICS reporting a rise from +3 in July to +7. This trend is expected to continue, offering prospective buyers a broader selection of properties. Enhanced availability could further stimulate market activity as buyers have more options to explore.
Preparing for future challenges
As the market absorbs these changes, attention turns to the Autumn Budget Statement and its possible repercussions. While optimism prevails, many industry commentators and potential buyers will remain watchful of fiscal policy shifts that could alter the landscape.
