Headlines
UK housing market stumbles, employers lose confidence on budget worries
Published by Global Banking and Finance Review
Posted on October 8, 2025
3 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 8, 2025
3 min readLast updated: January 21, 2026
The UK housing market continues to decline as businesses lose confidence over budget concerns, with potential tax impacts looming.
By William Schomberg
LONDON (Reuters) -Britain's housing market lost momentum for a third month in a row and confidence among businesses has fallen sharply, according to two surveys published on Thursday that showed worries about finance minister Rachel Reeves' November budget.
The Royal Institution of Chartered Surveyors said its measures of buyer demand and agreed sales were stuck in negative territory in September, as they both were in July and August.
The RICS house price balance, which measures the difference between the percentage of surveyors seeing rises and falls in house prices, improved slightly to -15 from -18 in August.
Tarrant Parsons, RICS' head of market research and analysis, said there was a broad sense of hesitancy in the market.
"Ongoing uncertainty around potential measures in the upcoming budget is also likely adding to the prevailing cautious sentiment," Parsons said.
Reeves is expected to raise taxes in her November 26 budget to remain on track to meet her targets for fixing the public finances. Reports in British media have suggested that she might look to the housing market as a source of extra tax revenue.
An unexpected fall in mortgage lender Halifax's measure of house prices in September published on Tuesday was also seen by economists as a sign of worries about the budget.
In the rental market, the RICS measure of landlords making properties available dropped to its lowest since May 2020 while demand from renters remained stable, contributing to an expected 3% increase in rents in over the next 12 months.
The supply of rental properties has been hit by landlords selling homes and apartments after a rise in borrowing and other costs in recent years and due to their worries about planned legislation to give more rights to tenants.
A separate survey by the Institute of Chartered Accountants in England and Wales showed confidence among businesses sank to its lowest level in three years in the July-to-September period.
A record 60% of businesses said the tax burden was a growing challenge, the ICAEW survey found.
Suren Thiru, the institute's economics director, said many employers were feeling the hit from Reeves' decision in her first budget last year to raise their social security bill.
"The mounting squeeze from plummeting confidence and a weakening outlook for domestic sales and employment means the economy will struggle to deliver the uplift in growth needed to avoid more painful decisions at the budget," Thiru said.
(Writing by William Schomberg; editing by David Milliken)
Business confidence is a measure of how optimistic or pessimistic business leaders are regarding the future economic environment and their own company's performance. High confidence often leads to increased investment and hiring.
A mortgage is a loan specifically used to purchase real estate, where the property serves as collateral. Borrowers repay the loan amount plus interest over a specified period.
The rental market encompasses the supply and demand for rental properties, where landlords lease their properties to tenants. It is affected by housing availability, rental prices, and economic conditions.
A budget is a financial plan that outlines expected income and expenses over a specific period. It helps individuals and organizations manage their finances effectively and make informed spending decisions.
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