Political Uncertainty Threatens Housing Market Revival – RICS

Political uncertainty under incoming Prime Minister Andy Burnham is stalling the UK housing market's revival, according to the RICS Residential Market Survey. Speculation over radical property tax overhauls and borrowing costs has buyers delaying decisions, keeping market activity subdued. [1, 2]

RICS Survey Key Findings

• New Buyer Enquiries: Improved to -29% from -34%, but remain deeply negative.
• Agreed Sales Balance: Marginally improved to -32% from -35%.
• New Instructions to Sell: Fell sharply to -23% from -10% (weakest reading in over a year).
• Near-Term Sales Expectations: Improved to -16%, though no significant recovery is expected near-term. [1, 2, 3]

The Burnham Factor

Prospective buyers are pausing purchasing decisions amid speculation that the incoming administration could introduce sweeping property taxation changes, including extending the "mansion tax" and aligning capital gains with income tax rates. [1, 2]

Industry Perspectives on the Housing Market

“Until there is greater clarity over both the political backdrop and the path of interest rates, housing market activity is likely to remain relatively subdued in the near term.”

Estate Agent Today

 Tarrant Parsons, head of market research and analysis at RICS, said: "Any nascent improvement remains fragile and is now being tested by renewed political uncertainty on the domestic front... Uncertainty around the outlook for inflation and borrowing costs continues to weigh on sentiment."