As we move into autumn, the housing market remains steady but cautious. Summer saw a modest rise in activity, supported by improving sentiment and lower mortgage rates, though economic and policy uncertainties continue to weigh.
The Bank of England held the base rate at 4.0% in September, signalling that rate cuts may be slower than expected. Swap rates underpinning mortgages have risen slightly, prompting lenders to adjust rates upward, suggesting a gradual rise in borrowing costs ahead.
On the ground, the picture is mixed. Affordable areas are performing well, while prime markets remain subdued. London prices grew just 0.7% year-on-year in August, leaving values below 2022 levels, whereas nationally, average property values rose 2.8%, with regional variations across the South East and South West.
Speculation around property taxation adds further uncertainty ahead of the November Budget, with potential reforms including shifting stamp duty, introducing a single annual property tax, or removing the CGT exemption on main residences. Meanwhile, the labour market shows signs of softening, though wage growth remains supportive of affordability.
Overall, the market is resilient, with stable transactions and steady buyer demand. Yet with inflation persistent and policy changes possible, the final months of 2025 could still hold surprises.
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