Housing market bounces back after budget

Estate agents were busier than expected last month, with most selling more homes and receiving more inquiries despite the uncertainty caused by the budget.
A number of agents in the latest survey from the Royal Institution of Chartered Surveyors reported some apprehension among buyers in the weeks leading up to the budget on October 30. Eoin Hill, of SDL Surveying in Newbury, in Berkshire, was among those to note “pre-budget nervousness”.
On the whole, however, the consensus was that the housing market had held up better than many had feared. Of the 269 estate agents who were polled by the Rics, the majority said they had agreed more sales in October than in the previous month, which some put down to people wanting to move ahead of any budget changes.
“We have had a wave of exchanges and completions, probably prompted by a desire to exchange before the budget,” Simon Milledge, of Jackson-Stops in Blandford Forum, in Dorset, said.
John King, from Andrew Scott Roberston in Merton, southwest London, added: “The increased activity in sales and registrations this month was a combination brought about in part by media attention over tax rises in the budget and lower mortgage rates.”
There is a hope that, with the budget and any related uncertainty now out of the way, the market will continue to pick up. A net 34 per cent of agents expected to be selling more homes in three months’ time, while a slightly greater number thought they would be busier this time next year.
“[There was] a slight hiatus ahead of the budget but the market [is] now perking up again,” Ian Perry, from Perry Bishop, an estate agent in Cheltenham, in Gloucestershire, said.
For 18 months after Liz Truss’s mini-budget in September 2022, the housing market was stuck in a downturn as mortgage rates spiralled. However, those rates have edged lower in recent months, which has prompted households to revive moving plans.
For the fourth month in a row, a majority of estate agents polled by the Rics reported an increase in the number of inquiries from prospective buyers. Most were also seeing an increase in new instructions coming to market, which the Rics said had created a “near-term pipeline for listings [that] is relatively solid”.
Reflecting that pick-up in activity, a net 16 per cent of respondents thought house prices were going up and most expected they would be higher still in a year’s time. The consensus two months ago was that prices were not moving.
“The UK housing market saw a continued pick-up in activity through October, with the recent improvement in buyer demand translating into growth in the number of sales being agreed,” Tarrant Parsons, head of market analysis at the Rics, said. “Just as importantly, forward-looking sentiment points to this brighter trend remaining in place in the coming months.”
He did, though, caution that the post-budget rise in bond yields, which dictate mortgage rates, could “present something of a headwind” over the short term.
In the lettings market, most agreed that there had been an increase in the number of tenants looking for rental homes over the summer. However, at the same time there had been a sharp drop-off in new supply. A net 29 per cent of letting agents said there had been a fall in landlord instructions, which was the most negative reading since the end of 2021.
As a consequence, the vast majority believed rents, which were already at record highs, would continue to rise.