Property

UK housing market slows as budget uncertainty and tax fears overshadow prospects for 2026

Thursday, 13 November 2025 5:03AM UTC

Amidst mounting uncertainty ahead of the UK government's Autumn Budget, the housing sector experiences a significant slowdown, with declining demand, subdued prices, and growing concerns over proposed tax reforms, casting doubt on an imminent market rebound in 2026.

The UK housing market is currently grappling with a palpable sense of uncertainty as it awaits the government's upcoming Autumn Budget, which many hope will provide clearer direction but may also intensify existing pressures. Recent data, notably from the RICS UK Residential Market Survey for October 2025, reveals a marked slowdown: buyer enquiries have declined to their lowest since April, with a net balance of -24%, while sales activity also dipped, reflecting widespread hesitancy among buyers and sellers alike. This tentative stance stems largely from fears about potential tax changes affecting property ownership, particularly concerning stamp duty, capital gains tax, and inheritance tax, which are causing notable caution around higher-value properties, especially in London. Agents report a decline in transactions for homes priced above £1 million, and new vendor instructions have slumped to levels unseen since 2021. Price growth is subdued, projected to soften further in the short term, although some surveyors expect modest improvements in 2026. These subdued conditions are expected to persist through the remainder of 2025, with any meaningful recovery unlikely before early 2026 once the budget's impacts become clearer and seasonal factors improve.

The commercial property development sector is mirroring this general market fragility. Taylor Wimpey, one of the UK’s largest homebuilders, reported that its net private sales rate per development fell to 0.63 homes per week between late June and early November 2025, down from 0.71 in the same period the previous year. The company attributes this slowdown to pre-budget uncertainty combined with enduring affordability issues. CEO Jennie Daly highlighted that while market conditions remain challenging, unlocking increased housing supply depends critically on reactivating effective demand, particularly among first-time buyers who continue to face financial constraints. Despite these hurdles, Taylor Wimpey retains its annual targets, anticipating UK home completions in the range of 10,400 to 10,800 and projecting a stable operating profit around £424 million. The firm also notes some positive progress through enhanced cooperation with local authorities, which is aiding planning approvals, an encouraging sign amid the broader market slow-down.

Similarly, other leading housebuilders echo concerns about budget-related uncertainties exacerbating existing affordability and market confidence issues. Barratt Redrow has flagged that speculation about potential increases in stamp duty and overall economic headwinds, such as high inflation and weak consumer confidence, are likely to further dampen sales prospects for the fiscal year 2026. However, Barratt Redrow’s CEO, David Thomas, expressed confidence in the long-term fundamentals of the UK housing market despite these short-term challenges. Meanwhile, Persimmon remains cautiously optimistic, reporting steady sales rates and maintaining its annual home completion targets amid continued economic uncertainty and mortgage rate volatility. Industry analysts suggest that while short-term volumes may stay subdued, some growth is expected to return in 2026 as market conditions gradually improve.

The impact of proposed tax reforms looms large over the market, with reports underscoring the chilling effect these have had, especially in the premium sector. Speculation that Chancellor Rachel Reeves might introduce a national property tax on homes over £500,000 and impose capital gains tax on sales of properties exceeding £1.5 million has driven a measurable drop in buyer demand and new listings for high-value homes. According to the Zoopla House Price Index from September 2025, demand for properties above £500,000 fell by 4%, with a sharper 11% decline for homes over £1 million. In contrast, demand and price growth remain more robust in lower-priced regions, such as Kirkcaldy and Oldham. Experts note that serious buyers may benefit from acting promptly, given the typical property transaction timeline of six to seven months and the risk of missing opportunities amid growing market caution.

Renters in the UK are also feeling squeezed, with a Barclays report highlighting that rising rent and mortgage costs, alongside increasing utility bills, are outpacing inflation and eroding disposable incomes. This financial strain limits renters’ ability to save for home purchases, contributing to low confidence in their likelihood of buying a home soon. Only a minority of renters expect to purchase property within the next five years, reflecting broader economic uncertainty and challenging affordability. The report underscores that renting is often now more costly than owning a mortgage, consuming a larger share of income and placing financial strain on many households. This dynamic feeds into the cautious atmosphere permeating the housing market overall.

Taken together, these factors paint a complex picture of the UK housing market in late 2025. The sector finds itself in a "holding pattern," awaiting government clarity on fiscal measures that will critically influence buyer and seller behaviour. While these uncertainties and affordability constraints are likely to suppress activity through the end of the year, industry voices remain alert to the possibility that clear, well-targeted policies could revive demand and stability. The coming months are therefore pivotal, with the Budget announcement poised to either halt the market's current slowdown or deepen it further, underscoring the delicate balance facing the UK's housing sector.

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Source: Noah Wire Services

More on this

https://www.mpamag.com/uk/news/general/budget-uncertainty-dampens-uk-housing-market/556344 - Please view link - unable to able to access data
https://www.mpamag.com/uk/news/general/budget-uncertainty-dampens-uk-housing-market/556344 - The UK housing market has experienced a marked slowdown as uncertainty surrounding the upcoming Autumn Budget has led to reduced buyer demand, sales, and new property listings. Recent data from the RICS UK Residential Market Survey for October 2025 shows that new buyer enquiries have declined, with a net balance of -24%, the lowest since April. This trend is evident across all regions, reflecting a nationwide hesitancy as households postpone decisions until after the government’s fiscal plans are announced. Sales activity has also weakened, with agreed sales registering a net balance of -24%, down from -17% the previous month. While short-term sales expectations remain subdued, a net balance of +7% of surveyors anticipate a modest improvement in 2026. New vendor instructions have continued to fall, reaching their weakest level since 2021, and appraisal activity—a key indicator of future supply—has dropped to -37%. The national price balance stands at -19%, consistent with recent months, with London, the South East, and East Anglia seeing the most pronounced declines. Over the next quarter, prices are expected to soften further, although expectations for the next 12 months have turned positive, with a net balance of +16%. Tenant demand has levelled off, but landlord instructions have fallen sharply, reaching their lowest point since April 2020. While rents are still forecast to rise in the near term, the pace of growth has slowed compared to recent years. Surveyors have raised concerns about the impact of the Renters’ Rights Act and possible tax increases on landlord confidence. “The housing market continued to show weakness in October, with activity levels drifting lower amid a lack of buyer confidence,” said Tarrant Parsons, head of market research and analysis at RICS. “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. 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.” Many market participants have described the current environment as a “holding pattern,” with both buyers and sellers awaiting clarity from the government. There is particular concern about potential changes to property-related taxes, including stamp duty, capital gains, and inheritance tax. Higher-value properties, especially in London, appear especially sensitive to these uncertainties, with several agents reporting reduced activity for homes priced above £1 million. The subdued conditions are expected to persist through the end of 2025, with any significant recovery likely to be delayed until early 2026, once the effects of the Budget are fully understood and seasonal factors improve. Housebuilders have also reported weaker conditions. Taylor Wimpey, one of the country’s largest residential developers, has seen its net private sales rate per development fall to 0.63 homes per week between June 30 and Nov. 9, compared to 0.71 in the same period last year. The company attributed the slowdown to “uncertainty in the housing market ahead of the November budget,” as well as ongoing affordability challenges. “Market conditions remain challenging, impacted by uncertainty ahead of the upcoming UK budget and continued affordability pressures,” said Jennie Daly, chief executive of Taylor Wimpey. “Increased housing supply can only be unlocked by effective demand, particularly for affordability constrained first time buyers.”
https://www.reuters.com/world/uk/uks-taylor-wimpey-reports-dip-autumn-sales-2025-11-12/ - Taylor Wimpey reported a slowdown in its autumn 2025 sales as British homebuyers hesitated ahead of the anticipated UK budget announcement on November 26, leading to a nearly 4% drop in its share price. The homebuilder cited ongoing affordability concerns and market uncertainty as contributing factors, reflecting broader trends in the housing industry also seen by peers like Barratt, Redrow, and Bellway. Despite these challenges, Taylor Wimpey maintained its full-year forecast, expecting UK home completions between 10,400 and 10,800 with an operating profit of approximately £424 million ($569 million), and 210-215 sales outlets by year-end. The firm's weekly net private sales rate decreased to 0.63 per outlet compared to 0.71 the prior year, and its order book fell to 7,253 homes (excluding joint ventures), down from 7,771. However, CEO Jennie Daly noted improved cooperation with local authorities and progress in planning approvals. Analysts at Peel Hunt anticipate modest volume growth in 2026 due to the subdued order book under current conditions.
https://www.reuters.com/world/uk/uks-barratt-redrow-warns-budget-uncertainties-heighten-fiscal-2026-sales-risks-2025-09-17/ - Barratt Redrow, the UK's largest homebuilder, has warned that uncertainties surrounding the upcoming UK budget on November 26 could further strain home sales prospects for fiscal year 2026. The company notes that the housing market is already under pressure due to high inflation, elevated interest rates, and weak consumer confidence, exacerbating affordability concerns. Additionally, speculation over potential stamp duty increases is adding to the sector’s challenges. Despite these short-term hurdles, CEO David Thomas emphasized confidence in the long-term fundamentals of the housing market. Barratt Redrow also released its annual financial results for the first time since its merger with Redrow, reporting a significant revenue increase to £5.58 billion for the year ending June 29, up from £4.17 billion a year prior. Its adjusted pre-tax profit reached £591.6 million, surpassing market expectations of £515.7 million.
https://www.reuters.com/world/uk/uks-persimmon-says-track-home-completions-this-year-2025-05-01/ - UK homebuilder Persimmon announced it is on track to meet its annual home completion target despite ongoing economic uncertainty. The company noted that while geopolitical issues have not yet affected business confidence, supply chains, or sales rates, it remains cautious due to potential impacts on mortgage rates and consumer spending. For the four-month period ending April 27, Persimmon's sales rate improved by 1% year-over-year, prompting a mixed market response with shares initially dipping but later recovering. Housing demand in the UK continues to face challenges, including inflation, slow interest rate reductions, and the conclusion of property transaction discounts. Analysts from Peel Hunt see Persimmon as well-positioned in a recovering market, citing its wide market presence, centralized production, and expertise in timber framing as strengths in managing costs and supply issues. The company's forward sales rose from £2.09 billion to £2.34 billion, and it expects minimal impact from U.S. tariffs due to no direct trade with the U.S.
https://moneyweek.com/investments/house-prices/zoopla-house-price-index-budget-tax-stalls-housing-market - The September 2025 Zoopla House Price Index highlights a slowdown in the UK’s high-end housing market due to speculation over potential tax changes in the upcoming Autumn Budget. Rumours suggest Chancellor Rachel Reeves might replace stamp duty with a national property tax for homes over £500,000 and possibly introduce capital gains tax on sales of homes worth more than £1.5 million. This uncertainty has led to a 4% drop in buyer demand and a 7% fall in new listings for properties above £500,000, with demand down 11% for £1 million+ homes. In contrast, housing activity in lower-priced areas, particularly where average prices are under £200,000, has remained strong, with notable price growth in places like Kirkcaldy and Oldham. Despite national price growth slowing to 1.4% in August from 1.9% in December 2024, stability in mortgage rates has helped preserve demand. However, the increased supply, legislative pressures on landlords, and the looming budget have further dampened sentiment, particularly in the prime market. Experts suggest serious buyers may benefit from acting now, as average property transactions take six to seven months to complete and delays could lead to missed opportunities.
https://moneyweek.com/investments/property/mortgage-rent-spending-increases-inflation - A Barclays report reveals growing financial pressure on UK renters, as rent and mortgage spending rose 5.2% and utility bills climbed 2.2% in the year to July 2025, outpacing the 3.6% inflation rate. This trend is narrowing disposable income, limiting the ability of renters to save for homeownership. Only 12% of renters expect to buy a home within a year, and just 16% within five years, reflecting deteriorating confidence in the housing market. The average UK house price increased 2.5% year-on-year to £271,619 in June. Affordability challenges are acute, with 37% of renters unable to afford homes in desired areas and only 17% actively saving for deposits, down from 31% in January. Barclays notes that despite repeated interest rate cuts since mid-2024, renting now often appears costlier than mortgages, consuming 30.8% of a renter's income compared to 26.6% for homeowners. Over a quarter of renters struggle with monthly housing costs, versus 15% of homeowners. While some renters continue building savings, widespread pessimism is stalling confidence in both the housing market and the broader UK economy, which Barclays says must improve to unlock consumer spending power.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The narrative is current, published on 13 November 2025, and discusses recent developments in the UK housing market amid budget uncertainties. The content includes data from the RICS UK Residential Market Survey for October 2025, indicating a decline in buyer enquiries and sales activity. The report also mentions Taylor Wimpey's recent sales performance and the impact of potential tax reforms on the market. These elements suggest that the narrative is fresh and reflects the latest market conditions. However, some information overlaps with previous reports from October 2025, indicating that certain aspects may have been recycled. For instance, the RICS survey data from September 2025 has been previously reported. Additionally, the narrative references a Reuters article from 12 November 2025, indicating that some content is recent. Overall, the freshness score is high, but the presence of recycled information warrants a slight deduction.

Quotes check

Score: 9

Notes: The narrative includes direct quotes from industry leaders, such as Taylor Wimpey CEO Jennie Daly, discussing the impact of market conditions on housing supply and demand. These quotes are consistent with statements made in recent reports, including the Reuters article from 12 November 2025. The consistency of the quotes across multiple sources suggests that they are accurately attributed and not fabricated. No significant variations in wording were found, indicating that the quotes are consistent with their original sources. Therefore, the quotes are reliable and contribute positively to the narrative's credibility.

Source reliability

Score: 7

Notes: The narrative originates from Mortgage Introducer, a publication that focuses on the mortgage and property sectors. While it provides industry-specific insights, its reputation and editorial standards are not as widely recognized as those of major outlets like the Financial Times or BBC. The reliance on a single source for the majority of the content introduces some uncertainty regarding the narrative's reliability. However, the inclusion of data from reputable organizations like RICS and references to established news outlets like Reuters adds credibility. The use of direct quotes from industry leaders further supports the narrative's authenticity. Despite these strengths, the overall source reliability score is moderate due to the publication's niche focus and limited recognition.

Plausability check

Score: 8

Notes: The narrative presents a coherent analysis of the UK housing market's current state, highlighting the impact of budget uncertainties on buyer demand, sales activity, and property listings. The inclusion of recent data from the RICS UK Residential Market Survey for October 2025 and statements from Taylor Wimpey CEO Jennie Daly aligns with known market trends and challenges. The discussion of potential tax reforms and their effects on the market is consistent with ongoing policy debates. The narrative avoids sensationalism and provides a balanced view of the situation. However, the reliance on a single source for the majority of the content and the presence of recycled information from previous reports slightly diminish the overall plausibility score.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): MEDIUM

Summary: The narrative provides a timely and coherent analysis of the UK housing market amid budget uncertainties, supported by recent data and direct quotes from industry leaders. While the source's reliability is moderate and some information overlaps with previous reports, the overall content is plausible and informative. The inclusion of recycled information and reliance on a single source introduce some uncertainties, but these do not significantly undermine the narrative's credibility.

UK housing market
Autumn Budget
property prices
tax reforms
market slowdown