Where the market stands
The Royal Institution of Chartered Surveyors reported its house price index at minus 28 in August, a modest lift from minus 29 a month earlier. A reading below zero means more agents are seeing price cuts than increases, and that has been the case since April 2025. Agents foresee prices sliding over the coming three months, and they see London as particularly weak.
Demand, sales and the outlook from agents
RICS tracked better readings for buyer interest and sales activity in August, which the group's head of market research Tarrant Parsons said suggests the market is "gradually finding its footing." He also cautioned that calm may not last. "The Bank of England's increasingly hawkish tone, on the back of renewed volatility in global energy markets, is a reminder that the borrowing cost outlook could yet deteriorate further," Parsons said. He said speculation about Chancellor of the Exchequer John Healey raising property taxes is "another source of caution for both buyers and sellers," he said.
Rates, approvals and tax worries
Borrowing costs have climbed since the war in Iran/) erased hopes of rate cuts. According to Moneyfacts, the typical two‑year fixed mortgage now stands at 5.67%, compared with 4.83% immediately prior to the conflict, and the Bank of England is seen holding rates at its Sept. 17 meeting. Separate data hints at cooling: Lloyds said this week that UK house prices posted a year‑on‑year decline, something not seen since November 2023, and BOE figures last week showed mortgage approvals slipping to levels last seen in January 2024. The latest RICS report also flags a familiar pattern from the run‑up to the 2025 Labour budget, when buyers pulled back amid talk of a levy on the UK's priciest homes.
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What this means for your money
For now, agents see a steadier trajectory for prices over the next year overall, but they still expect London to lag, with values there likely to keep slipping. The mix of higher mortgage costs, a hawkish BOE tone, and tax uncertainty can sap confidence quickly, especially if memories of 2025's pre‑budget pause resurface.
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