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Listings of UK homes for sale fell at the fastest pace in two years in September, while rental instructions plunged to a new post-pandemic low as uncertainty over November’s Budget hit sentiment.
The Royal Institution of Chartered Surveyors said on Thursday that its measure of “new vendor instructions” fell to minus 15 last month, down from minus 4 in August and the lowest since August 2023.
The index, which measures the difference between the share of agents reporting rising and falling listings, marked “a noteworthy departure” from a string of 13 consecutive positive readings up to August.
Similarly, the rental index tracking “landlord instructions” dropped to minus 38 last month, the lowest reading since records began in 2015, exempting the spring of 2020, when the housing market largely shut during the first weeks of the Covid lockdown.
“The market has slowed significantly due to the impending Budget and all the uncertainty it brings” in relation to “possible future tax increases”, said Simon Hobbs, surveyor at London & City Estates.
Speculation over the announcement of potential tax rises at the November 26 Budget has intensified, with some economists estimating a fiscal gap of between £20bn and £30bn.
Reeves’ key fiscal rule is to fund day-to-day spending entirely through tax revenues by 2029-30, a pledge she met only with a small amount of headroom in the Office for Budget Responsibility’s March forecasts.
Among the proposals reportedly under consideration are changes to inheritance tax, a new levy to replace stamp duty, and the extension of national insurance contributions to landlords’ rental income.
On Wednesday, Conservative leader Kemi Badenoch closed her party’s annual conference with a surprise pledge to scrap stamp duty on property purchases, calling the levy a “bad tax, an un-Conservative tax”.
Landlords have also been affected by the renter’s reform bill that will end “no fault” evictions under Section 21, which allows landlords to throw tenants out with no reason, and will tighten standards for the conditions and maintenance of rented homes.
“Reform bill concerns grow, while investment sales remain negligible amid uncertainty,” said Mark Wilson, founder of the agency Globe Apartments. “Waiting on the Budget doesn’t help either,” he added.
The survey also showed the index tracking sales agreed was negative at minus 16, indicating a larger proportion of agents reporting contraction than expansion.
Sales expectations also dropped to minus 9, suggesting “that respondents do not foresee any significant turnaround in sales volumes any time soon,” according to the survey.
The index for buyers’ demand was also negative at minus 19 and more agents reported falling rather than rising house prices, pushing the Rics house price gauge to minus 15 and the three-month price expectations to minus 21.
Tarrant Parsons, head of market analytics at Rics, said: “The housing market continues to struggle for momentum, with seemingly no clear catalyst on the horizon to spark a turnaround over the near term.”
He added: “Ongoing uncertainty around potential measures in the upcoming Budget is also likely adding to the prevailing cautious sentiment.”
