Rightmove: Budget tax fears pushed asking prices down in October
Pre- and post-Budget tax rise fears pushed asking prices down by more than usual during October, Rightmove claims.
The property portal’s latest House Price Index reports average new seller asking prices dropped by 1.4% between September and October.
That is larger than the typical 0.8% drop for this time of year and was attributed to concerns about tax rises ahead of and after the Autumn Budget.
Average asking price values are still up 1.2% annually though at £366,592.
The latest report illustrates how the property market slowed in the build-up to the Budget.
Ahead of the fiscal statement in early October, Rightmove data shows buyer demand – based on enquiries to estate agents – was 23% ahead of the same period in 2023.
This figure dropped to 18% following the Budget but has now ticked back up to 23% following the interest rate cut in November.
Rightmove said the number of sales agreed is still 26% ahead of the quieter market at this time in 2023 and supply of new listings is up 6%.
However, Rightmove does still expect the usual seasonal slow-down in home-moving activity as we get closer to Christmas.
The property website said there are signs that the latest Bank of England’s November interest rate cut is boosting buyer demand, which it predicts will help asking prices rise by 4% next year – its highest prediction since 2021.
Tim Bannister, director of property science for Rightmove, said:
“Despite the post-Budget gloom, the market is more positive than last year, with average asking prices currently 1.2% higher than in 2023, in line with our forecast of a 1% increase for 2024.
“We now predict that we’ll see a stronger year for prices in 2025.
“The signs are that the market momentum that we’ve been seeing this year will continue into next year, especially if mortgage rates drop to a level that gives greater affordability to some movers who have been waiting in the wings until now.
“However, we still expect some twists and turns next year.
“The speed at which mortgage rates come down next year will be key in determining activity levels for some of the market’s traditionally busiest periods, and sellers will still need to price temptingly enough to secure a buyer while the choice of homes for sale remains as high as it is right now.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said:
“Although these are asking, rather than selling, prices, this month’s larger-than-usual drop confirms what we are seeing in our offices.
“There is more demand and sales agreed are up too but the increase in listings means buyers are spoilt for choice so sellers must be competitive if they want to stand out from the crowd.
“The Budget did not do the housing market any favours and may even extend the cautious tone as measures announced will probably mean mortgage rates remain higher for longer.
“On a slightly more positive note, first-time buyers are trying to snap up properties at better prices which investors decide against due to higher Stamp Duty, before the lower rates which apply to them disappear next April.”
Nathan Emerson, chief executive of Propertymark, added:
“The Bank of England’s recent cuts to interest rates are likely to spur on more movement and further stimulate the market.
“With many buyers in England and Northern Ireland looking to move quickly before the Stamp Duty rises in April, we could see more people willing to accept heavier negotiations than normal, which could result in a small dip in the average house price.
“With the potential of a rise in the volume of transactions on the horizon, we would anticipate a spiked shift towards the improvement of the overall health of the economy.”
Kindly shared by Estate Agent Today
