The UK housing market experienced further weakening in November, as uncertainty surrounding the Autumn Budget dampened buyer confidence and activity. This slowdown affects both sales and lettings sectors, with implications for landlords facing new tax measures and subdued tenant demand.

Overview of Market Conditions Post-Budget

The latest RICS Residential Market Survey highlights a continuation of declining housing market activity, with agents reporting falling buyer demand, reduced property listings, and sluggish sales throughout November. The political speculation and leaks prior to the Budget announcement contributed to households adopting a cautious stance, delaying decisions to buy or sell.

For landlords, the lettings market is also showing signs of strain. Landlord instructions remain negative at -39%, indicating fewer properties being offered to let. This is partly attributed to the new income tax on property introduced in the Budget, which many respondents identified as a deterrent to investment. Tenant demand has similarly cooled, with a net balance of -22%, marking the lowest level since April 2020.

Tenant Demand and Rent Price Expectations

Simon Rubinsohn, RICS chief economist, commented on the lettings market: “Although tenant demand does appear to be softening, the lack of stock is keeping rental expectations elevated and the additional tax levied on landlords in the Budget will likely exacerbate this trend.”

Near-term rent price expectations remain modestly positive at +6%, suggesting only marginal increases in rents over the coming months, with a forecasted rise of around 2.5% in 2025. For landlords, this signals a cautious rental market where rent growth is limited but still present, influenced by supply constraints despite weaker tenant interest.

Buyer Enquiries and Sales Outlook

The survey reveals a sharp decline in new buyer enquiries, with a net balance of -32% in November, down from -24% in October and the weakest reading so far this year. Agreed sales figures remain low at -23%, consistent with the downbeat trend observed throughout the autumn months.

Near-term sales expectations have also deteriorated, falling to -6% from -3%. However, agents express a more optimistic view for 2026, with a net balance of +15% anticipating an increase in sales volumes, up from +7% last month. This suggests that while the market is currently subdued, there is cautious hope for improvement next year.

Supply Constraints and Price Movements

New property listings continue to fall, with a net balance of -19%, closely matching October’s -20%. Appraisal levels have declined for four consecutive months, indicating a weak supply pipeline as the market enters winter. Nationally, prices are softening, registering a net balance of -16%, with London experiencing a more pronounced drop at -44%.

For landlords, the reduced supply and falling prices may present challenges in terms of property valuation and sales prospects, while also affecting rental market dynamics.

Market Sentiment and Political Impact

Tom Bill, head of UK residential research at Knight Frank, noted: “The barrage of property tax speculation before the Budget unsurprisingly soured sentiment among buyers and sellers. Now there is clarity, we expect existing transactions to accelerate before Christmas, and activity should remain relatively strong in early 2026.”

He added that a downward trajectory for interest rates could support demand, but political uncertainty remains a key risk. Mr Bill also highlighted that ongoing political developments, such as the upcoming local elections, could influence market sentiment further.

Implications for Landlords

Landlords should be aware that the new income tax measures introduced in the Autumn Budget are contributing to a cautious investment environment. The combination of subdued tenant demand, limited rental growth, and falling buyer enquiries suggests a period of adjustment ahead. However, supply constraints may help maintain rental values to some extent.

Monitoring interest rate movements and political developments will be important for landlords and agents planning for the year ahead. The expectation of improved market conditions in 2026 offers some optimism, but near-term challenges persist.

Looking Ahead: Trusted Partners Hub Launch

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This platform will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/.