The UK housing market faces at least two months of uncertainty as speculation mounts over potential tax reforms and the Treasury delays setting a date for the Autumn Budget, Coventry Building Society has warned.
Reports suggest the Chancellor is considering a package of reforms, including changes to stamp duty, the removal of capital gains tax exemptions on higher-value homes, and an extension of National Insurance contributions to include rental income.
But with the Office for Budget Responsibility requiring around 10 weeks’ notice to prepare economic forecasts, the earliest realistic date for the Budget is now November.
That leaves the property market caught in a holding pattern at a time when confidence remains fragile. Mortgage approvals rose slightly in July, but net borrowing slowed sharply and house price growth continues to soften, according to recent figures from the Bank of England and Nationwide.
REAL-WORD EFFECTS
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, says the speculation was already having real-world effects.
He adds: “Every time a new rumour surfaces it creates more uncertainty, and the housing market really doesn’t thrive on guesswork.
“Even the hint of tax changes is enough to make buyers and sellers worry about their next step.
“We could see people trying to hold off buying in case a tax break is around the corner, while others feel pressured to offload a property quickly before any rules change. That could mean chains collapse and families are left in limbo.”
CHOKING TRANSACTIONS
Analysts warn that prolonged uncertainty risks choking off transactions during the critical autumn period, traditionally one of the busiest times for completions. Any slowdown could deepen pressures on estate agents, housebuilders and conveyancers already grappling with weaker demand.
Tax changes have historically had a sharp impact on activity. Previous stamp duty reforms triggered spikes in sales as buyers rushed to complete ahead of deadlines, followed by months of subdued demand.
LANDLORD STRAIN
Extending National Insurance contributions to rental income would add further strain on landlords, potentially accelerating the exodus of private investors from the market.
Stinton says: “The Chancellor shouldn’t leave people twisting in the wind. We need clarity – either quash the rumours or confirm the details.
“And, most importantly, set a date for the Budget so buyers, sellers and the market know how much more of this they have to endure.”
