The UK housing market showed unexpected resilience in October, with estate agents reporting an increase in sales, an increase in buyer inquiries and a brighter outlook following the Autumn Budget.
Despite pre-Budget concerns, the housing market has outperformed expectations, according to the latest Royal Institution of Chartered Surveyors (Rics) survey. Of the 269 real estate agents surveyed, the majority reported higher sales in October compared to September, partly due to buyers seeking to complete transactions before potential Budget-related tax changes.
While some agents noted a slowdown in the weeks leading up to the October 30 budget, the overall sentiment was upbeat. “We have seen a flurry of exchanges and completions, perhaps driven by a desire to exchange ahead of the Budget,” said Simon Milledge of Jackson-Stops at the Blandford Forum, Dorset.
Likewise, John King of Andrew Scott Robertson in Merton, south-west London, attributed the rise in activity in October to a mix of media coverage around potential tax rises and an easing of mortgage rates.
“(There was) a slight gap before the Budget but the market is now (bouncing) back,” noted Ian Perry of Perry Bishop in Cheltenham, Gloucestershire.
Looking ahead, 34 per cent of estate agents expect to sell more homes within three months, with greater confidence about activity levels this time next year.
The survey also found a continued rise in buyer inquiries for the fourth straight month, along with an increase in new listings, creating what Rex described as a “relatively strong” pipeline in the near term. Reflecting this recovery, 16 percent of respondents believe home prices are rising, a significant shift from two months ago when prices were viewed as flat.
Tarrant Parsons, Head of Market Analysis at Rics, highlighted the momentum, saying: “The recent improvement in buyer demand is translating into growth in the number of sales agreed. Forward-looking sentiment points to a continuation of this brighter trend in the months ahead.”
However, he warned that the rise in bond yields after the Budget, which is impacting mortgage rates, could pose challenges in the short term.
In the rental market, demand for tenants remained strong during the summer, but supply constraints intensified. A net 29 per cent of letting agents reported a decline in landlord instructions, representing the most negative reading since late 2021.
With rental homes in short supply, most agents expect rents – already at record levels – to continue to rise, increasing pressure on renters in a highly competitive market.