The UK’s housing market is bracing for a prolonged period of difficulty, as experts warn that the fallout from last year’s budget speculation will continue to weigh heavily on seller confidence.
Despite the relief felt when November’s Budget avoided the feared property-focused measures, the damage has already been done, according to leading industry figures. Speaking to City AM, they highlighted the lingering impact of months of uncertainty, which has left many prospective sellers reluctant to list their homes.
“The housing market is still reeling from the budget speculation of 2022,” said Sarah Beeny, a prominent property expert. “Even though the Chancellor ultimately steered clear of major interventions, the damage to seller confidence has already been done, and we’re likely to see the effects for some time to come.”
Data from the Royal Institution of Chartered Surveyors (RICS) supports this view, with the organisation’s latest survey showing a sharp decline in new property listings. In December, the number of new instructions fell at the fastest rate since the early days of the COVID-19 pandemic, as homeowners adopted a “wait and see” approach.
“Sellers are understandably cautious right now,” explained Andrew Montlake, managing director of the mortgage broker Coreco. “The combination of economic uncertainty, rising interest rates, and the lingering impact of budget speculation has made many homeowners reluctant to test the market.”
This hesitancy among sellers is compounding the challenges faced by the housing market, which is already grappling with the fallout from higher borrowing costs. The Bank of England has raised interest rates seven times since December 2021, pushing up mortgage payments for many homebuyers.
“It’s a perfect storm for the housing market,” said Lucian Cook, head of residential research at the estate agent Savills. “Sellers are holding back, while buyers are facing affordability pressures due to rising interest rates. This is likely to result in a cooling of house price growth, and potentially even some modest price declines, in the months ahead.”
Despite the gloomy outlook, industry experts remain hopeful that the market will eventually stabilise, provided the government can deliver a period of economic and policy stability. In the meantime, they caution that the road ahead is likely to be bumpy for both buyers and sellers.
