Major housebuilder Berkeley Group has reported that property buyers are postponing purchase decisions until after the government’s Budget announcement on 28th October, citing market uncertainty and speculation over potential tax changes.
The company stated it was receiving “good and stable levels of enquiries” but noted that customers “without an immediate need to move” were adopting a more cautious approach. “Some buyers may defer transactions until after the Budget at the end of October and any election uncertainty dissipates,” Berkeley said in a statement reported by The Times.
Calls for government intervention
Berkeley has called on the government to introduce “targeted intervention” to support the housing market. The appeal comes amid widespread speculation about Chancellor John Healey’s first Budget, which could include changes to property taxation.
Market observers anticipate potential increases to Mansion Tax rates and possible alignment of Income Tax and Capital Gains Tax rates, which would significantly impact landlords. The timing of property purchases has become increasingly critical as buyers weigh potential policy changes.
Market timing concerns
Industry body Propertymark has warned that the housing market faces a critical period in the coming weeks, with the Bank of England’s interest rate decision this week and the Budget scheduled for 28th October. The Budget falls between two Bank Rate announcements this month and in November, with a third potential rate change possible before Christmas.
Former Prime Minister Gordon Brown has advised Prime Minister Andy Burnham against increasing property taxes, stating that property is “taxed quite heavily” already and suggesting Stamp Duty may require reform instead. This intervention reflects broader concerns about the potential impact of tax changes on an already cautious market, particularly as market shifts continue to affect various segments of the property sector.
Market outlook
The combination of Budget uncertainty, interest rate speculation, and potential tax changes has created a holding pattern in parts of the housing market. While enquiry levels remain stable according to Berkeley, the conversion of interest into completed transactions appears to be slowing as buyers await clarity on the government’s fiscal policy direction.
