Does the market even need a Budget boost?

The latest market analysis from London lettings and estate agent, Benham and Reeves, has suggests that, despite mounting speculation around what support might come for homebuyers in the forthcoming Autumn Budget, the UK property market is already showing impressive stability and resilience – raising the question of whether it even needs a policy boost at all?

Benham and Reeves analysed the latest data on mortgage approvals, sales transactions, house prices and second home activity to assess the current strength of the housing market ahead of the Budget.

The data shows that mortgage approvals remain remarkably consistent, even in the face of higher interest rates.

In August of this year (latest available), 64,680 mortgages were approved across the market, despite the Bank of England’s base rate still sitting at 4% – far higher than today’s homebuyers have become accustomed to in recent years.

While this figure sits some way below the 100,000-plus approvals seen during the pandemic’s stamp duty holiday boom, approvals have held between 61,000 and 68,000 per month for the past 18 months straight, demonstrating an impressive level of resilience by historic standards and in the face of continued economic headwinds.

This sustained demand has translated into steady growth in sales activity.

The latest HMRC figures show that in March this year, in the lead up to the reversion of Stamp Duty thresholds, 149,940 property transactions completed across the market in England. This is the only time this figure has exceeded 100,000 since the property market boom seen during the pandemic.

A sharp correction followed the next month, falling to just 43,980, the lowest monthly total since April 2020 when the housing market briefly shut due to lockdown measures.

Since then, however, activity has steadily improved each month, with an impressive 87,360 sales completed in August. Over the past five years, the average monthly transaction level has stood at 86,289, meaning current activity is comfortably above the long-term trend.

This consistent momentum in mortgage approvals and sales has supported continued house price growth. According to the latest UK House Price Index, the average UK property value now sits at a record £295,670. This marks a new all-time high and underlines the market’s ability to maintain steady, measured growth, even in a higher interest rate environment.

Even the second home market has remained robust despite government efforts to temper investor activity. Provisional figures show that there were 1,228 receipts from higher rates on additional dwelling transactions in Q1 2025. While this marks an 18% quarterly drop following last year’s Autumn Budget increase in Capital Gains Tax, it still represents the second-highest total since Q4 2022, highlighting the enduring strength of this niche segment of the market.

Marc von Grundherr, Director of Benham and Reeves, commented:

“A further attack on second homeowners, should it materialise in the upcoming Autumn Budget, could dampen this niche segment of the market. But overall, market fundamentals remain undeniably strong, with mortgage approvals, transactions and house price growth all holding firm and then some.

Yes, we may see a momentary dip in activity in the run-up to the Budget, as buyers wait to see what’s announced, but it’s clear that the property market simply doesn’t need a helping hand. In fact, many would argue that the more measured pace of market activity we’re currently seeing is far healthier for all involved.

In fact, as we saw with the disastrous Kwarteng-Truss mini-Budget, a poorly executed fiscal intervention can cause serious disruption to the property market. So, as long as Labour doesn’t drop the ball horrifically, the reality is that the market is in a very strong position – and that should continue post-Budget, with or without Government help.”