House prices could slip back in September as weaker mortgage activity and uncertainty ahead of the Budget weigh on the autumn property market, according to property expert Jonathan Rolande.
Rolande (main picture) expects prices to be “flat to slightly down” this month and warns that August’s modest improvement should not be interpreted as the beginning of a sustained recovery.
Nationwide’s latest index showed UK house prices increased by 0.2% month-on-month in August, reversing July’s 0.1% decline. Annual growth stood at 1.6%, with the average property valued at £275,465.
The figures continue a relatively subdued period for house price growth, while separate Bank of England data points to weaker mortgage market activity feeding through into the autumn.
MORTGAGE ACTIVITY WEAKENS
Bank of England figures show net mortgage borrowing fell to £4.3bn in July, while approvals for house purchases dropped to 56,100 from 64,300 in June. Remortgage approvals also declined to 34,500.
Rolande believes that slowdown could become increasingly visible in transactions during the traditionally important autumn selling season.
He says: “August gave the housing market a small but surprising lift. It is positive news, but I wouldn’t mistake it for a recovery. In fact, I expect September to give most of that gain back.
“The mortgage numbers tell the story. Approvals lead completions by roughly three months, so the weakness we can see now is likely to arrive in the autumn market.”
BUDGET UNCERTAINTY
Rolande also expects speculation ahead of the 28 October Budget to make some buyers and sellers more reluctant to commit.
He says he has already received enquiries from landlords considering selling before the Budget because of concerns about possible tax changes.
“Buyers hate uncertainty,” he says. “If they don’t know what is coming, many will simply wait.
“That means September, normally one of the strongest periods of the year for the housing market, could be thinner than sellers are hoping.”
Rolande says landlords considering an exit before the Budget would need to move quickly if they want a realistic prospect of completing beforehand.
He adds: “August offered the market a little ray of sunshine. I fear September will bring the clouds back.
“2026 is increasingly looking like a year that will go out with a whimper rather than a bang.”
