Activity weakens as buyers and sellers await government tax decisions
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 (pictured right), 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.”
Taylor Wimpey’s forward order book, excluding joint ventures, stood at 7,253 homes as of Nov. 9, a 7% decrease year-on-year, with its value falling to approximately £1.6 billion. The broader housebuilding sector has faced similar pressures, with shares in Taylor Wimpey and other major developers declining amid speculation about possible tax changes in the Chancellor’s upcoming statement.
“Here’s the hard evidence showing what we already knew – Labour’s fearmongering about what’s coming in the next Budget has caused an otherwise booming housing market to contract,” said Simon Gerrard, chair at Martyn Gerrard Estate Agents.
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