Property Budget Impact: Is It Needed?

Considering the property budget impact, a new perspective emerges on whether the UK market truly needs government intervention. Some industry experts argue that the panic is premature. They contend that the UK property market is demonstrating remarkable resilience and stability, questioning whether it truly requires the fiscal “helping hand” many are demanding.

This debate is fuelled by a tangible sense of hesitation in the market, a “pre-Budget gloom” where many potential vendors and buyers are adopting a ‘wait and see’ approach. However, a deeper analysis of market data suggests this pause may be a temporary blip rather than a symptom of a deep-seated malaise.

Data Reveals Stability Despite Property Budget Impact

Leading industry agencies, including Benham and Reeves, are painting a new picture. In fact, their analysis shows a market that is far from collapsing. By examining key metrics, a pattern of robust performance emerges, even in the face of significant economic headwinds like higher interest rates.

Mortgage Approvals Hold Firm

Despite borrowing costs rising substantially over the last 18 months, the desire for home ownership remains strong. Mortgage approval figures have shown remarkable consistency, holding steady within a stable range of 61,000 to 68,000 per month. This indicates that a solid baseline of buyers remains active and able to secure financing, underpinning the market’s core.

Transaction Volumes Creep Upwards

Activity levels, often pointed to as a sign of weakness, are also showing signs of steady improvement. The latest figures from HMRC confirm this upward trend. In August, for example, 87,360 sales were completed. This figure not only represents a monthly increase but also surpasses the recent average of 86,289, suggesting that momentum is quietly rebuilding, not dissipating.

House Prices Reach New Heights

Perhaps the most compelling evidence against the “gloom” narrative is the state of UK house prices. According to the most recent UK House Price Index, the average property value has climbed to a new record high of £295,670. This persistent growth, defying predictions of a crash, highlights a fundamental imbalance between supply and demand that continues to support valuations.

Second Homes: Stamina Against Property Budget Impact

Even segments of the market often considered more vulnerable, such as the second home and investment sector, have displayed surprising stamina.

Receipts from landlords and second homeowners dipped 18% quarterly. Despite this, Q1 2025 figures were the second-highest since Q4 2022.

This indicates that this part of the market remains robust. However, this is also a segment where government policy could inflict genuine damage. Marc von Grundherr warns against a “further attack on second homeowners” in the Budget. Specifically, he cautions this could unnecessarily “dampen this niche segment.”

The Perils of Interference: A Cautionary Tale

The central argument against a major Budget intervention is not just that the market doesn’t need it, but that such help could be actively harmful.

The property sector still bears the scars of the disastrous Kwarteng-Truss mini-Budget. Poorly executed interventions can cause severe disruption. For example, that event destabilised lenders, shattered buyer confidence, and triggered lasting volatility.

Many, including von Grundherr, argue that the “more measured pace of market activity” currently being observed is “far healthier for all involved” than a market artificially inflated by short-term stimuli.

A Market Poised for the Future

The consensus from this viewpoint is clear: the UK property market’s fundamentals remain “undeniably strong.” These experts see the momentary dip in activity preceding the Budget as a natural pause, not a precursor to a crash.

The market holds a strong position to continue its steady path after the Budget. Moreover, this should happen even if the government announces no new support measures. The greatest risk, it seems, is not government inaction, but a repeat of past policy blunders. As long as no one “drops the ball horrifically,” analysts expect the market’s inherent resilience to prevail.