Autumn Budget chills UK housing into 2026 slump
Autumn Budget chills housing; slump seen into 2026
RICS survey shows buyer demand, sales and listings fell after the Autumn Budget, with London prices hardest hit. Agents see recovery only by spring 2026.
The UK housing market lost further momentum in November as the government’s Autumn Budget weighed on confidence, according to the latest RICS UK Residential Market Survey. Agents report weaker demand, lower sales activity and fewer homes coming to market, and say a meaningful recovery is unlikely before spring 2026.
Survey respondents said uncertainty and media speculation ahead of the Budget discouraged buyers and sellers. Many welcomed the decision to apply the new higher council tax surcharge only to properties valued above £2m, but said it did little to lift overall sentiment.
Key indicators deteriorated
- New buyer enquiries registered a net balance of -32% in November, down from -24% in October and the weakest reading since late 2023.
- Agreed sales remained subdued at -23% (vs -24% in October), underscoring a persistent slowdown in transactions.
- Near-term sales expectations slipped to -6% (from -3%), pointing to a largely flat outlook over the next three months. Over 12 months, however, a net +15% of respondents expect sales volumes to rise, up from +7% previously.
- New instructions posted -19% (vs -20%), while market appraisals fell further to -40%, indicating a thin pipeline of future listings.
Prices: London lags as national trend softens
Prices continue to edge down at the national level, with a headline net balance of -16% in November. London was notably weaker at -44%—the most negative reading in the UK—reflecting sensitivity to the new high-value council tax surcharge. In contrast, respondents in Northern Ireland and Scotland reported ongoing price growth.
Price expectations were little changed in the near term at -15% (vs -12%). Over the next year, a net +24% of respondents anticipate prices will rise again, the strongest 12‑month reading since June.
Lettings: supply tight, demand cooling
The lettings market also showed signs of strain. Landlord instructions remained deeply negative at -39%, with many agents pointing to a new property income tax announced in the Budget as a potential drag on supply. Tenant demand weakened to a net balance of -22%, the softest since April 2020.
While some of this reflects seasonality, agents said the broader trend suggests cooling demand. Rent expectations indicate only marginal gains over the next three months (+6%), the flattest outlook since early in the pandemic; on a 12‑month view, rents are projected to rise by about 2.5%, slightly below recent averages.
What the experts say
Simon Rubinsohn, RICS
The Budget is unlikely to materially change the market’s near-term trajectory. He pointed to affordability pressures and elevated borrowing costs as ongoing headwinds, though he noted the one-year outlook has improved as expectations build that the Bank of England may have more room to cut rates in 2026.
Tom Bill, Knight Frank
Pre‑Budget tax speculation dented sentiment, but greater clarity should help existing deals complete before Christmas and support activity in early 2026. He cautioned that political uncertainty could become a key risk next year.
Anthony Codling, RBC Capital Markets
The survey captured an initial negative reaction to the Budget. He expects a more upbeat December, citing strong Boxing Day portal traffic as a likely catalyst for renewed interest.
Outlook: subdued winter, tentative turn in 2026
Overall, RICS’s November survey suggests the market will remain subdued through the winter, with scope for improvement from early 2026 as borrowing costs ease, seasonal conditions turn, and policy uncertainty fades.
London appears most exposed to tax changes, while Scotland and Northern Ireland show greater resilience. In rentals, limited landlord supply is likely to keep upward pressure on rents even as tenant demand cools.
