While economic forecasters are predicting fair weather for the property sector this Autumn, there is still one big cloud on the horizon – The Budget.
What the Labour leadership has described as a ‘painful’ fiscal event is due to take place on October 30th and it’s a constant reminder that into each life, a little rain must fall.
The August rate cut combined with hopes of another to come (probably in November) sparked a revival in both seller and buyer confidence.
And Rightmove’s latest House Price Index appeared to reflect this showing the average price of a house coming up for sale increasing by 0.8% this month – which is an annual rise of 1.2%.
The portal also says that estate agents’ stock hit a 10-year high as the ‘usually busier’ Autumn market got underway earlier than normal after the August holiday lull.
In fact, the good news has been coming thick and fast in recent weeks as wage increases have outpaced inflation and transaction numbers have started ticking over nicely.
After a long period in which the sector has had to prove its resilience against a backdrop of higher rates and a cost-of-living crisis, the latest round of stats have come as a blessed relief.
Going for growth
But then we remember the prospect of a highly-flagged gloom-laden Budget. The spectre at the feast.
It’s certainly true that fears over tax hikes could mean the champagne is kept on ice for a while.
With pledges that income tax, national insurance and corporation tax won’t be candidates for increases, commentators believe that Chancellor Rachel Reeves may have set her sights on Capital Gains Tax, Inheritance tax and even Stamp Duty.
All of these taxes could impact property sales or timing of property sales in one way or another.
And, of course, although the signs are certainly there that the market is picking up, the truth is that affordability is still very much an issue for many first-time buyers who are having to dig deeper paying higher rents while at the same time trying to save for deposits.
This government was elected on a ‘going for growth’ ticket and much of that growth is dependent on building more homes – 1.5m of them by the end of this Parliament.
There’s a long road ahead, but taking a backward step now would be disastrous. The government has said it wants more home ownership and therefore, more affordable homes.
The market is doing its thing – bouncing back after some tough times. The best thing Rachel Reeves could do now is to get out of the way and leave us to get on with it.
