UK housing market, business confidence slump ahead of Reeves’ November budget

Britain’s housing market lost further momentum in September, while business confidence slumped to its lowest level in three years amid growing anxiety over Finance Minister Rachel Reeves’ upcoming budget.

The RICS house price balance improved slightly to -15 from -18 in August, indicating fewer surveyors reported price declines, though buyer demand and agreed sales remained weak for a third straight month.

• RICS analyst Tarrant Parsons said market sentiment remains cautious, with uncertainty over potential tax measures in the November 26 budget weighing on activity.

Reports suggest Reeves may seek new housing-related tax measures to meet fiscal targets. Economists also linked the recent drop in the Halifax house price index to pre-budget jitters.

In the rental market, landlord listings fell to their lowest since 2020, while tenant demand stayed firm, pointing to rents rising around 3% over the next year.

A separate ICAEW business survey found corporate sentiment had deteriorated sharply, with 60% of firms citing the tax burden as a growing challenge.

• The institute warned that falling confidence, weak domestic demand, and rising employment costs threaten the modest growth needed to stabilise public finances.

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Market-impact thoguths:

• FX: Rising fiscal uncertainty and soft housing data could weigh on sterling.
• Rates: Weak sentiment may reinforce expectations for slower BoE tightening or earlier rate cuts.

This article was written by Eamonn Sheridan at investinglive.com.