Britain’s housing market slowed sharply in October as jitters ahead of the Autumn Budget dented buyer confidence and kept sellers on the sidelines, according to the latest RICS UK Residential Market Survey.
The report points to a broad-based decline in activity, with buyer demand, agreed sales and new listings all falling further into negative territory.
Survey respondents overwhelmingly linked the downturn to pre-Budget nerves and fears of tax increases that could hit property transactions and investment.
New buyer enquiries fell to a net balance of -24%, down from -21% in September and the weakest reading since April.
FALTERING SALES
The pullback was evident across all regions, with households delaying decisions until fiscal policy becomes clearer.
Sales also continued to falter, slipping from -17% to -24%, while new vendor instructions recorded a third consecutive decline at -20%, the lowest since 2021. Appraisal activity, a lead indicator for future listings, dropped to -37%, suggesting that fewer homeowners are preparing to enter the market.
The national price balance stood at -19%, consistent with modest declines seen in recent months, with the steepest falls in London, the South East and East Anglia.
“Prices are expected to soften slightly over the next quarter.”
Prices are expected to soften slightly over the next quarter (-12%), though surveyors anticipate a recovery in 2026, with 12-month expectations improving to +16%.
In the rental sector, tenant demand flattened (-4%), while landlord instructions fell sharply (-33%), the weakest result since April 2020.
REGULATORY CHANGE
RICS said concerns over the Renters’ Rights Act and possible tax changes are weighing on landlord sentiment.
Agents across the country report a “holding pattern” as the market awaits the Chancellor’s statement, with particular caution in the higher-value brackets.
Properties priced above £1 million are seeing stalled activity amid speculation over possible changes to stamp duty, capital gains and inheritance tax.
CAUTIOUS MOOD PERSISTS
Tarrant Parsons, head of market research and analysis at RICS, said: “The housing market continued to show weakness in October, with activity levels drifting lower amid a lack of buyer confidence.
“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.”
CRITICAL TIME
And he added: “The coming months will be crucial in assessing how the market responds to the Budget, which could prove a turning point in either direction.
“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 survey suggests that the housing market is unlikely to regain momentum before early 2026, with any recovery dependent on the scale and direction of the Chancellor’s fiscal decisions later this month.
“Buyers and sellers have hit the pause button”
Tom Bill, head of UK residential research at Knight Frank, added: “By the time the Budget arrives, the housing market will have endured three months of intense speculation around property taxes.
“Unless there is a pressing need to move, some buyers and sellers have understandably hit the pause button.
“While there will be clarity after 26 November, the wide range of tax rises on the table are likely to dent sentiment and put downwards pressure on house prices.”
UNEXPECTED POLICY ANNOUNCEMENTS
Emma Cox, MD of Real Estate at Shawbrook, said: “Prospective buyers appeared cautious this October, with new enquiries, sales activity, and property listings all softening amid pre-Autumn Budget uncertainty.
“Many are likely waiting to see whether any unexpected policy announcements, particularly around property taxation, will influence their next move.
“Similarly, while demand in the rental market has eased slightly, the ongoing decline in landlord instructions could once again put upward pressure on rents as supply remains constrained.”
RENTERS’ RIGHTS ACT
And she added: “Legislative developments such as the Renters’ Rights Bill rightly aim to strengthen tenant protections, but it is equally important that the Government continues to recognise and support landlords – whether experienced investors or those new to the market. With the added pressures of higher borrowing costs, capital gains tax, and mortgage rates, professional landlords must remain resilient.
“The health of the private rental sector ultimately depends on their continued participation.
“As we approach the new year, landlords should prepare for potential policy shifts and remain agile to adapt to changing conditions. By doing so, they can protect their portfolios and position themselves to take advantage of emerging opportunities in what remains a dynamic and evolving market.”
