With the Chancellor’s Autumn Budget fast approaching, it seems that many prospective homebuyers are waiting before making their next move.
Property website Zoopla has reported that buyer demand has dropped by around 8% compared to this time last year, while sales agreed are down 3%. The average UK house price now stands at £270,000, which is still 1.3% higher than a year ago, showing that house price growth remains modest but stable. It is currently taking longer to sell properties, with the average sale time now at 37 days, which is 10% higher than a year ago.
Why the slowdown?
Uncertainty surrounding the forthcoming Autumn Budget, revealed in November, is a significant factor, with many buyers keen to see the outcome before making long-term plans. It’s also worth noting that the market was unusually busy this time last year, with buyers rushing to complete purchases before the stamp duty relief changes in April 2025.
Mortgage approvals rise
Interestingly, while buyer activity has cooled slightly, mortgage approvals actually went up last month. The Bank of England reported that lenders approved 65,900 mortgages in September – the highest level since December last year.
Remortgaging activity dipped slightly, with approvals for remortgaging with a new lender falling to 37,200; however, the overall data shows resilience in the market.
What’s happening with property prices?
Across London, property prices have now fallen for a third consecutive quarter according to estate agent Savills, leaving them down around 2% over the past year. Until recently, these declines were primarily limited to prime central London, but they have now spread more broadly.
Elsewhere in the UK, price falls have eased to -1.3% this quarter. Higher-value homes have seen steeper adjustments, although the gap between different market segments is narrowing. Sales agreed are up in Scotland (3%), Yorkshire and the Humber (4%), and the South West (1%).
What could happen next?
The Bank of England’s Monetary Policy Committee will review the base rate on 6 November. There’s speculation that we might see a rate cut, although it’s far from guaranteed, and the rate could well remain at 4%. Recent inflation figures were lower than expected, which could indicate a potential cut, but inflation remains higher than the Bank of England’s 2% target. The Bank may prefer to wait a bit longer before making further cuts, especially with the Autumn Budget coming up. We will keep you updated on any key developments.