Darren Murphy’s Market Update
The UK residential property market faces a crossroads ahead of the Budget and introduction of the Renters Rights Act.
As autumn settles over the UK, the residential property market finds itself at a pivotal juncture. Both the sales and lettings sectors are grappling with shifting economic conditions, evolving legislation, and changing consumer behaviour. With the government’s forthcoming Budget and the anticipated Renters’ Rights Act on the horizon, stakeholders across the industry are bracing for a period of recalibration.
Sales Market: Resilience Amid Uncertainty
Despite economic headwinds, including elevated interest rates and persistent inflationary pressures, the UK residential sales market has shown pockets of resilience. Transaction volumes have softened compared to the post-pandemic highs, but regional disparities remain stark. Prime areas in the South East and parts of the Midlands continue to attract demand, particularly from cash buyers and downsizers seeking lifestyle-driven moves.
Affordability remains a concern. First-time buyers face mounting challenges, with mortgage approvals tightening and deposit requirements rising. The upcoming Budget (November 26th), is widely anticipated to include measures aimed at stimulating housing supply and supporting affordability. Industry insiders are calling for targeted incentives—such as stamp duty relief for first-time buyers or increased funding for shared ownership schemes—to reignite momentum.
However, it is also widely anticipated that any limited Stamp Duty reform may include the introduction of a new annual property tax and it has also been mooted that there may be additional taxes for landlords with National Insurance being levied on rental income.
Lettings Market: Demand Outstrips Supply
The lettings sector is under acute pressure. Demand for rental properties has surged, driven by would-be buyers delaying purchases and a growing population of mobile professionals. Yet supply remains constrained, exacerbated by landlords exiting the market due to tax changes, regulatory burdens, and uncertainty surrounding the Renters’ Rights Bill.
Rents have risen sharply in many urban centres, with London, Manchester, and Bristol seeing double-digit annual increases. This has prompted concerns about housing affordability and tenant welfare, particularly among younger renters and families.
Renters’ Rights Act: A New Era for Tenancy Rights
The Renters’ Rights Bill, expected to progress through Parliament this autumn, promises to be one of the most significant shake-ups in the private rental sector in decades. Key proposals include the end of fixed term tenancies and the abolition of Section 21 ‘no fault’ evictions, the introduction of a new Decent Homes Standard for rented properties, and the creation of a mandatory ombudsman for private landlords.
While tenant advocacy groups have welcomed the reforms, many landlords remain cautious. The potential for increased compliance costs and reduced flexibility has led some to reconsider their portfolios. The government faces a delicate balancing act: improving tenant protections without triggering a mass landlord exodus that would further strain supply.
Looking Ahead: Policy, Confidence, and Adaptation
As the Budget and legislative reforms loom, the property market’s trajectory will hinge on clarity, confidence, and adaptability. Agents, landlords, and developers are watching closely for signals of government support and regulatory direction. For buyers and renters alike, the coming months may bring both challenges and opportunities.
In this climate, proactive engagement and transparent communication will be key. Whether navigating new compliance frameworks or adjusting investment strategies, stakeholders must remain agile.
The UK residential property market is evolving—and those who adapt fastest will be best positioned to thrive.
As always the team and myself at Christopher Nevill are here to help you with your plans.
Darren Murphy
