UK housing market slows on tax and rate uncertainty — RICS

Britain’s housing market lost momentum in July, with price growth slowing to its weakest pace in a year as concerns mounted over possible tax rises in Chancellor Rachel Reeves’ upcoming budget, according to the Royal Institution of Chartered Surveyors (RICS).

RICS’ house price balance fell to -13 from -7 in June (vs. Reuters poll expected of -5), its lowest reading since July 2024. Measures of buyer demand and agreed sales slipped back into negative territory, while the near-term sales outlook was flat. Chief Economist Simon Rubinsohn said sentiment was clouded by uncertainty over the Bank of England’s next rate decision, after last week’s narrow vote to cut borrowing costs, and speculation over further tax hikes in October or November.

The rental market also weakened, with RICS’ gauge of new landlord instructions hitting its lowest since April 2020. Surveyors expect this to push rents higher, citing landlord concerns about incoming legislation to strengthen tenant rights.

The survey’s downbeat tone contrasts with reports from Halifax and Nationwide, which both showed a rise in July house prices.

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