House prices are dropping, confidence among buyers is shot and make no mistake: this government and its hapless management of the economy is to blame.
This morning, data from the Halifax showed the average UK house price edged down by 0.3% (£794) in September and that, over the past 12 months, prices have grown by just 1.3%, the slowest annual rate since April 2024. The typical home now costs £298,184.
Why are prices falling? It’s simple. Buyers are MIA. They’re missing in action because they are nervous ahead of the Budget and battening down the hatches — at scale.
Higher mortgage rates and constant rumours of new property taxes mean people are holding back, even when prices are being slashed. Much of the South East in particular is barely moving.
The dire state of the public finances and mismanagement of the economy by Labour means the forthcoming Budget could be brutal. People are expecting the worst from a government completely out of its depth. And they may well get it.
Amid such uncertainty, it’s unsurprising that many buyers are sitting tight. It’s this lack of demand that resulted in prices falling last month and the annual rate of growth softening.
Right now, sellers are having to cut asking prices hard to tempt anyone through the door, but until confidence returns, we’re in less of a buyers’ market than a no one’s market. Lower prices count for nothing if confidence has vaporised.
Yesterday, the Government announced new plans to overhaul the buying process.
Anything that speeds up the homebuying process is welcome, but with sentiment so low and so few homes being built despite the preposterous 1.5m new homes promise, this is simply tinkering around the edges.
If the government truly wants to make homebuying a dream rather than a nightmare, as it claims, it needs to stop hammering people and businesses already under immense pressure with more and more taxes — and build more homes.
This morning, the Halifax said the affordability picture is gradually improving, which it is as house price growth softens and lenders desperately try to get the market moving with ever more innovative products and criteria.
But improved affordability will not tackle the profound crisis of confidence in the property market, for which this government is absolutely to blame.
