The autumn property market appears slightly busier than the summer market, although mortgage costs continue to constrain activity. Despite the Bank of England holding interest rates steady for a considerable period, lenders have raised mortgage rates, a typical two-year fixed rate mortgage is now approximately 1.5% higher than at the start of the year.

With rates unlikely to fall soon, most active buyers are taking advantage of more competitive property prices and current mortgage deals rather than waiting and risking further rate increases.

Property prices have fallen this year, making buying more attractive, particularly for first-time buyers. These lower prices offset mortgage rates that remain higher than in recent years.

The budget offered little support for the property market. The withdrawal penalty for first-time buyers purchasing homes above the Lifetime ISA’s £450,000 property price limit will be removed. The Government will introduce a First Time Buyer ISA in April 2029 and reduce the penalty on existing Lifetime ISAs from 25% to 20%. These changes may give buyers more flexibility but are unlikely to significantly improve confidence.

The Government will introduce My First Home, an equity loan scheme to help buyers purchase new-build properties from selected builders. While some national housebuilders will benefit, the scheme will do little for the wider housing market; selling a standalone new home does not create a chain of sales. It therefore misses the point.

Landlords face an additional 2% tax on top of the 2% announced in last year’s budget—a substantial burden for those with mortgages. This is likely to push more landlords out of the market, reduce the supply of privately rented homes and drive-up rents. Tenants also inevitably bear the cost when landlords pass on tax increases through higher rents. Historically, tenants have lost out when landlords face additional taxes. The Government should protect the private rented sector to avoid a potential housing crisis.