With activity weakening and buyers delaying major decisions, industry voices warn that policy indecision is doing lasting harm to market confidence
The UK housing market has slowed sharply as political indecision, high mortgage costs and speculation about new property taxes unsettle buyers and sellers ahead of the Budget.
Adrian Anderson, director of Anderson Harris, said conditions in the upper tiers of the market had weakened dramatically. The housing market for higher-value homes, he explained, is “extremely weak now because of the rumours around wealth tax and SDLT changes for higher valuer properties”. Many buyers are “waiting to see what happens”, while vendors are holding back listings “as demand is low until there is some clarity after the budget”.
Anderson said this hesitation reflected wider consumer unease. “There is weak consumer confidence as households are cautious due to slow wage growth, rising living costs, and political uncertainty, especially with talk of potential early elections,” he noted. “When people aren’t sure about the future, they delay big financial moves - like buying a house.”
He warned that the government’s approach had compounded the slowdown. “The government’s lack of a coordinated growth plan hasn’t helped confidence in the broader economy,” he said. “The Bank of England has kept rates high longer than expected to control inflation, making mortgages expensive and reducing buyer demand. Government indecision and economic drift are key contributors to the slow housing market.”
Others in the industry share his concern that policy drift is undermining both demand and supply.
Supply-side strain adds to pressure
Hemat Natha, director of Mortgage Advice Point, said the same lack of strategy was stifling construction and development. “They talk about cutting red tape and big infrastructure announcements, but have they cut any red tape out of planning? How are they incentivising developers to build or convert?” he asked.
He added that persistent labour shortages were worsening the challenge. “How are we going to build the homes with increased labour costs?” he said. “They’re making it difficult for the workers the country needs.”
Natha described a market stuck in neutral. “I haven’t seen any strategies communicated, and is there a strategy, really? The country’s at a standstill at the moment. Businesses are at a standstill,” he said.
The latest Halifax House Price Index shows that average UK property values fell by 0.3 per cent in September to £298,184 - the weakest annual growth since April 2024. The slowdown extends to construction: Department for Business & Trade data revealed brick deliveries dropped 19.4 per cent in August compared with July and were 8.8 per cent lower than a year earlier. Deliveries remain about 25 per cent below 2022 levels, signalling weaker house-building activity.
Natha said estate agents were already feeling the strain. “We’ve got a lot of stock, but nothing’s shifting. The stuff in the higher bracket, £500,000 plus, isn’t shifting as quickly, and that’s really worrying,” he said.
Confidence erodes
Both brokers agree that policy uncertainty and high borrowing costs have left the market adrift. Anderson said that until the government sets out a coherent economic plan and the Bank of England signals a path to lower rates, “the housing market will continue drifting.”
For now, buyers remain cautious, transactions are slowing, and the sector is waiting for direction - a market on pause until Westminster offers clarity.
