Budget via the rumour mill creates no bread for anyone

We are now less than a month away from the Autumn Budget, and yet it feels as though the housing market has already had to weather half a dozen Budgets this autumn alone. And none of them are real.
The sheer volume of speculation about what Rachel Reeves might do has been relentless, and the result is a market that has effectively been gossiped into a slowdown.

Zoopla’s latest House Price Index tells the story. Buyer demand is down 8% year-on-year, sales agreed are down 3%, and we’ve just seen the first annual fall in new sales since October 2023.

As Zoopla have pointed out, the usual pre-Christmas dip has arrived six to eight weeks early this year, and the other incredibly frustrating and irksome point is that this could quite easily have been avoided.

In other words, the rumour mill is already doing what rates, inflation, and uncertainty couldn’t quite manage on their own: it’s stalling momentum.

THE STUTTERING SOUTH

The impact is sharpest in southern England, where speculation has focused on potential new property taxes. Sales have dropped by 9% in Wales, 8% in the South East, 6% in the East of England and 5% in London.

The latter three regions are precisely where high-value properties dominate, and therefore exactly where the rumours are hitting hardest. Plus we have another four weeks of this.

Buyers hear market chatter of a mansion tax, or of stamp duty being replaced by an annual property levy, or of capital gains tax being applied to main residences over £1.5m and they simply step back. Why commit now when the rules might change before the end of November?

The further irony is that the fundamentals of the market remain steady. House prices are up 1.3% year-on-year, broadly the same as last autumn, and the average UK home is now worth around £270,000.

BACKLOG

There are 7% more homes for sale than a year ago, and the overall completion pipeline remains significant, around 350,000 properties, valued at over £100 billion, currently making their way through the process. That’s the largest backlog in more than four years.

Mortgage rates have also settled with a growing number of lenders cutting rates over the past week or so, first-time buyer demand remains healthy, and most sellers are still serious about moving.

POLICY MUD-SLINGING

So why the malaise? Because we’re currently living in a world where rumour has replaced policy, and the government appears to be quite willing to throw enough policy ‘mud’ at the wall in the hope that some of it gains traction.

Every weekend brings another leak or ‘well-placed source’ briefing that this Budget could bring a 1% mansion tax on homes above £2 million, or a new National Insurance charge for landlords, or a 2p income tax hike, or even a wholesale rewrite of council tax bands.

The problem isn’t just the noise; it’s that consumers hear it and respond, and the market feels the force of that. The psychological effect is real: early-stage buyers are now adopting a wait and see stance, and, quite frankly, who can blame them?

CONFIDENCE CRISIS

In a market so dependent on confidence, that’s toxic. Sellers see viewings dry up, agents struggle to price realistically, conveyancers and advisers find clients nervous about pressing ahead.

Of course, every pre-Budget period brings a certain amount of guesswork, but what we’ve witnessed over the past few months has gone beyond that. This has been policymaking by rumour. It’s chaotic, damaging, and entirely avoidable.

The government has replaced a housing/mortgage market of clarity with rumours, gossip and speculation. The irony is that even if none of these measures make it into the Chancellor’s red box, the uncertainty has already done its damage.

FRAGILE ECOSYSTEM

The industry cannot keep operating like this. Housing is not an abstract spreadsheet exercise; it’s an ecosystem that depends on stability and trust. When the goalposts move every week, or it is believed they might move, ordinary buyers and sellers lose faith. Advisers, lenders, and agents can deal with tough policies, but not with perpetual ambiguity.

So as we edge closer to November’s statement, the message to the government should be simple: get a grip. The fiscal challenge is real – we all understand the need to balance the books – but our market doesn’t need a month-long game of ‘guess the tax’.

If there are reforms coming, outline them. If not, say so. The longer this goes on, the more paralysis we invite.

Right now, we are living through the worst of all worlds, a market reacting to ghost policies. And while rumour might make headlines, it doesn’t make completions or instil confidence to act. This rumour mill creates no bread for anyone, and it’s time the government stopped feeding it.