House price growth stalls due to budget constraints
The housing market has experienced a slowdown in growth following the Autumn Budget, as revealed by the latest figures from Nationwide's House Price Index. The annual rate of house price growth dropped from 3.2% to 2.4%, marking a significant decrease in the months leading up to and around the Budget.
Delivered by Chancellor Rachel Reeves on Wednesday, the Autumn Budget received a positive reaction from the housing market. However, the uncertainty surrounding the Budget seems to have had an impact on buyer activity, causing a pause in the housing market.
Ed Phillips, CEO of Lomond, attributed this slowdown to the uncertainty surrounding the Autumn Statement. According to Phillips, the market is expected to accelerate after the Budget dust has settled.
Marc von Grundherr, director of Bentham and Reeves, commented on the findings, stating that a slower rate of house price growth was expected during a Budget month. Despite the pause, the market still recorded positive growth on both a monthly and annual basis.
Nationwide's full figures can be accessed for further analysis. The monthly rate of house price growth slowed from 0.6% to 0.1%, and new figures suggest that the build-up to the budget negatively affected the costs of current homes.
In a positive development, house prices climbed by 0.1% in October compared to September. Furthermore, Ed Phillips expects further cuts to interest rates to contribute to the acceleration of the rate of house price growth.
Meanwhile, Wealden Council is facing challenges in meeting new housing targets. In a separate development, Homes England is moving into a new development in Manchester.
This slowdown in house price growth aligns with broader market sentiment where forecasts for house price growth were revised downward in anticipation of the Budget. Experts highlighted increased uncertainty and the possibility of future tax changes affecting buyer confidence, especially in the higher end of the market.
In summary, the immediate impact of the Autumn Budget was a notable slowing of house price growth and reduced buyer activity, as captured by Nationwide's House Price Index and corroborated by market analysts' downgraded growth forecasts ahead of and following the Budget announcement.
The Autumn Budget's uncertainty negatively affected not only buyer activity but also the housing market's finance aspect, as revealed by Ed Phillips, CEO of Lomond. The market's acceleration is anticipated after the Budget dust settles, with further cuts to interest rates contributing to the expected increase in the rate of house price growth, as suggested by Phillips.
