While the recent pace of transactions and house price growth is unlikely to be sustained over the coming months, we doubt it will slow by as much as some sentiment indicators suggest. But by crimping households’ disposable income, our view that the Chancellor will raise around £38bn, mostly via higher taxes for households, could mean that house prices rise by about 2.5-3.0% in the year to Q4 2026 rather than our forecast of 3.5%. Higher property taxes would be a bigger drag on activity and prices, particularly for the most expensive homes and regions. And a tax on landlords would be a headwind to rental supply and a tailwind to rents.
We’re hosting a 20-minute online briefing at 3pm GMT on Wednesday 3rd December to discuss what the Budget will mean for the property outlook. (Register here.)
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