Back in September, there was a lovely sense of optimism brewing in the property market—like the first sip of a crisp rosé on a sunny afternoon. Mortgage rates were falling, the Bank of England had trimmed rates for the first time in four years, and buyer demand was blossoming.
However, with hints and murmurs coming from Downing Street about the upcoming Autumn Budget, I ended with a note of caution, warning that the October 30th fiscal event might bring an unexpected twist. It turns out, it wasn’t just a curveball—it was more like a wrecking ball.
It’s safe to say the Budget has reshuffled the deck entirely. Although we didn’t see a reaction quite like the infamous mini-Budget of 2022, the markets swiftly interpreted the Autumn Budget as highly inflationary. As a result, mortgage rates have risen, erasing the progress we enjoyed over the summer.
Even after the Bank of England’s additional base rate cut of 0.25% on November 7, bringing it down to 4.75%, mortgage rates continued to climb. You could almost hear the collective gasp: “Wait, aren’t rates supposed to drop when the base rate is cut?” If only it were that simple. While those on tracker mortgages will benefit, most fixed rate mortgages are priced off ‘Sonia swaps’, which are a gauge of where the markets believe the base rate will be in the future — and they believe it will be higher for longer as the Bank of England seeks to control the inflation triggered by the Budget. And if that wasn’t enough to keep us on our toes, the Trump victory sent another shockwave through the market, stoking fears of a global inflationary trade war. The chilly relationship between Labour and Trump’s new regime isn’t exactly helping matters.
Despite these headwinds, the property market is managing to hold its ground—just barely. According to the Halifax, house prices nudged up by 0.2% in October, while the Nationwide recorded a modest increase of 0.1%. Both indices indicate that the pace of annual house price growth slowed in the lead-up to the Budget, as uncertainty weighed on buyer confidence. This may be due to the sudden 2% increase in stamp duty for additional property purchases, pushing it up to 5% of the purchase price. I definitely saw chains collapse and buy to let investors re-evaluating their position
But here’s the silver lining: even if house prices wobble a bit as buyers absorb the Budget’s impact on their wallets, don’t expect a nosedive. The UK’s property market is stubbornly resilient, and the chronic undersupply of housing thanks to decades of governmental dithering hasn’t magically resolved itself. While 2025 may not be the sparkling year we’d hoped for, I wouldn’t bet against the enduring allure of bricks and mortar.
See you in 2025.
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Katy Eatenton
Katy Eatenton
Katy is a mortgage and protection specialist at Lifetime Wealth Management with over 20 years experience in the industry. She has won several awards for her customer-centric approach and expertise and is regularly featured in the trade press, where she provides insights on the market and tips on best practice.
Katy Eatenton can be contacted on: 01932 216045
weybridge@lifetime.co.uk
www.instagram.com/katyeatenton_finance
You can even book directly in Katy’s diary at: www.calendly.com/katyeatenton_finance
This article also appears in the winter edition of Premier Magazine
