The UK housing market is showing signs of slowing as buyers and sellers adopt a “wait and see” approach ahead of next month’s budget, amid speculation that Chancellor Rachel Reeves could raise property taxes.
Data from Rightmove showed that in September, both new buyer inquiries and new seller listings fell by 5% compared with the same month last year. The property website described the market as “resilient” but noted that the typical post-summer bounce in activity has not materialised.
Property expert Colleen Babcock of Rightmove said the slowdown is most noticeable in the south of England, where potential buyers are holding back. She explained that speculation about higher taxes on expensive homes has encouraged many to pause until the budget is announced.
Reeves recently said in an interview that those with the “broadest shoulders” should pay their “fair share” of taxes. She also indicated that new measures to tackle inflation would feature in the forthcoming budget.
Among the options under consideration by the Treasury are a new tax on homes sold for over £500,000 and removing the capital gains tax exemption for primary residences above £1.5 million. Officials are also looking at introducing a new council tax band for higher-value properties in England. Labour MPs have pressed for a wider overhaul of property taxes in the upcoming budget.
Rightmove’s October snapshot showed that the average price of properties coming to market rose by 0.3%, or £1,165, to £371,422. This increase is below the 10-year average October rise of 1.1%. The slight slowdown in activity is partly attributed to last September’s unusually strong market, boosted by the first Bank of England rate cut in four years, which set a high benchmark for comparison.
Tom Bill, head of UK residential research at Knight Frank, said that stable mortgage rates and slightly lower prices have supported transactions over the past six months. However, he added that demand is now faltering for the second year in a row as buyers and sellers hesitate over potential tax changes. Bill described the situation as a “prolonged and frustrating game of ‘guess the tax rise.’”
Rightmove noted that high street lenders are also pausing, reflecting broader caution in the market. Experts warn that uncertainty around the budget could continue to hold back activity in the coming months.
A Treasury spokesperson said the government is taking steps to boost housing supply. Measures include streamlining planning permissions, using AI to speed up approvals, and reducing burdensome regulations to get more homes built faster. The spokesperson added that the budget will aim to balance funding for public services with policies that support economic growth and improve living standards.
The combination of potential tax hikes, lingering economic uncertainty, and cautious market sentiment means the UK housing market may face a slower autumn than expected. Buyers and sellers alike appear unwilling to commit until there is clarity on how property taxes and other budget measures will affect the cost of buying and owning a home.
