The UK housing market is entering a critical period over the coming weeks, with the Bank of England’s interest rate decision and the government’s Autumn Budget set to shape market sentiment through the remainder of the year, according to industry body Propertymark.
Chancellor John Healey will deliver his first Budget next month, positioned between two Bank Rate announcements scheduled for this month and November. A third opportunity for the Bank to adjust interest rates will come just before Christmas.
Nathan Emerson, Chief Executive of Propertymark, said: “Over the coming weeks, we will see further details of how the Bank of England feels the direction of travel should develop regarding the base rate. We will also see what key details will be announced regarding housing within the Autumn Budget. Both factors will determine future sentiment within the housing market over the coming months.”
Mortgage rates under pressure
Finance data firm Moneyfacts has warned that lenders are expected to raise mortgage rates, with HSBC and NatWest among the largest banks to increase rates since the start of this month. The development comes as the market experiences recent price pressures, adding further uncertainty for prospective buyers.
Rachel Springall, Finance Expert at Moneyfacts, said: “The pricing margins among major lenders are under pressure due to renewed volatility in the swap rate market, so it is somewhat inevitable for them to adjust rates. Borrowers expecting mortgages rates to drop in the coming weeks have had their hopes dashed.”
In July, the Bank held interest rates at 3.75%, though three members of its nine-strong Monetary Policy Committee voted for an increase. The decision reflected ongoing concerns about inflationary pressures despite weakening house price growth in recent months.
The combination of potential rate changes and fiscal policy announcements in the Budget is expected to significantly influence transaction volumes and buyer confidence through the final quarter of the year. Market observers suggest that clarity on both fronts will be essential for activity levels heading into 2027.
