Budget backfires on house price growth
In relation to the housing market, Labour’s Autumn Budget was something of a curate’s egg.
When chancellor Rachel Reeves delivered her Autumn Budget on Wednesday the reaction she received can be described as nothing short of mixed. However, the plans unveiled for the housing market received a pretty positive reaction – especially the idea to invest £5billion into delivering more homes between 2025-26. However, new figures from Nationwide’s House Price Index suggests the build-up to the budget negatively affected the costs of current homes.
The research, which was published this morning, shows house prices climbed by 0.1% in October compared to September, although this monthly rate of growth slowed from 0.6%.
Meanwhile, on an annual basis, the costs of homes increased by 2.4%, with this annual rate of growth again slowing from 3.2% the previous month.
Commenting on the findings, Marc von Grundherr, director of Bentham and Reeves, said: ‘A slower rate of house price growth was always to be expected during a Budget month as the housing market pauses for breath to see what the government has up its sleeve, but despite this, the market still recorded positive growth on both a monthly and annual basis which demonstrates just how far we’ve come so far this year.
‘Whilst there were no positive Budget initiatives announced that will supercharge market activity, we do expect to see a heightened level of activity between now and March of next year, as homebuyers scramble to complete before stamp duty relief reverts back to previous thresholds.’
Ed Phillips, Lomond CEO, added: ‘Stability has been the key component to the returning health of the UK housing market and so it’s no surprise that the rate of house price growth slowed during October, with the property sector enveloped by Autumn Statement uncertainty.
‘Now that the dust has settled and the property market has escaped largely unscathed, we expect the rate of growth seen across the market to once again accelerate, particularly with further cuts to interest rates on the cards.’
Nationwide’s figures can be accessed in full here.
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