Uncertainty ahead of the Autumn Budget is starting to have a measurable impact on the housing market, with more than a quarter of buyers already pausing their property plans.
New research from House Buyer Bureau, based on a survey of 1,193 current homebuyers in England, found that 27% have decided to delay their search until after the government has revealed its plans.
A further 21% remain undecided over whether to do so, meaning almost half of prospective buyers could temporarily step back from the market in the run-up to the Budget.
Annual headache
The firm’s Managing Director Chris Hodgkinson says: “Autumn Statement speculation has become an almost annual headache for the property market, and uncertainty over what might be announced can cause buyers to think twice before making such a significant financial commitment.
“For sellers, the concern is that we’re not just talking about would-be buyers who haven’t started looking yet. Many of those choosing to wait were already browsing the market, contacting agents and even attending viewings before deciding to sit on the fence.”
Just 52% of those surveyed said they were carrying on with their property search as planned.
Mortgage rate concerns
One of the bigger concerns for buyers who have put their plans on hold is what the Budget could mean for mortgage rates, which was cited by 23% of respondents.
Another 18% are concerned that taxes or the overall cost of buying a property could increase, with the same proportion specifically waiting to see whether there are changes to Stamp Duty.
House prices themselves are another consideration, with 13% concerned that measures announced in the Budget could affect property values, and another 15% simply want greater certainty before making such a significant financial commitment.
No help from Government
Relatively few buyers, though, are holding back in the hope of receiving government help. Just 8% are waiting to see whether any kind of financial support or incentives are announced on October 28th, falling to 5% for those specifically hoping for additional first-time buyer support.
A large proportion of those delaying their plans had already made significant progress with their property search.
54% of those who have decided to wait had been browsing properties online, with 19% having progressed as far as contacting estate agents.
A further 12% had already attended property viewings, while just 15% had yet to begin their search.
That means 85% had taken some action towards buying a home before deciding to hold fire until after the Budget.
It comes at a time when sellers are already facing stiff competition. Rightmove’s August House Price Index found the number of homes for sale was at a 12-year high for the time of year, with average asking prices falling 2% in August to £364,999, 1% lower than a year earlier.
There have, though, been some more encouraging signs since then, with buyer demand rising by 5% during the first week of September, according to Rightmove, showing that not everyone has been put off by uncertainty surrounding the Budget.
Waiting for greater certainty
The disruption to the market, however, is likely to prove relatively short-lived. According to Hodgkinson, “Once the Government has shown its hand, some of this uncertainty should lift, and buyers may well return to the market.”
