Much of the reaction to this week’s Budget has focused on its cautious nature, with the Chancellor seemingly determined to avoid major disruption, but while it may not have delivered any particularly dramatic surprises, that does not necessarily mean it will do no harm.
Indeed, when you examine some of the housing announcements alongside the latest Office for Budget Responsibility (OBR) forecasts, there are legitimate questions about whether certain measures could actually discourage activity in a market which is hardly firing on all cylinders.
The mortgage and housing markets were already facing challenges before the Chancellor stood up, and while there were positive announcements for first-time buyers, the overall approach feels rather piecemeal when there was an opportunity to address some of the wider barriers preventing transactions.
First-time buyer support is only part of the answer
The Your First Home equity loan scheme and proposed First-Time Buyer ISA are welcome developments, particularly if they help prospective purchasers overcome deposit and affordability challenges which have prevented them from entering the market.
However, supporting first-time buyers does not automatically translate into a healthier housing market, particularly if existing homeowners are reluctant to move, landlords are discouraged from investing and developers face an increasingly difficult environment.
This was arguably an opportunity to consider meaningful stamp duty reform, particularly when recent Yorkshire Building Society research suggests homeowners now move once every 21 years compared with approximately once every nine years during the late 1980s.
Reducing the financial barriers to moving could encourage greater activity throughout housing chains, freeing up properties for second-steppers, growing families and downsizers, while generating additional business across the mortgage, conveyancing and wider property sectors.
Instead, we have measures supporting certain buyers without necessarily addressing the reasons why so many existing homeowners are choosing to stay where they are.
The figures tell a more concerning story
The OBR's latest forecasts suggest property transactions across the forecast period will be around 4% lower than it anticipated back in March this year, largely reflecting higher mortgage rates and weaker growth in housing stock.
Although transactions are expected to rise from approximately 1.2 million in 2026 to 1.3 million by 2031, the OBR has also reduced its forecast for net additions to housing stock by 190,000, while its interest rate assumptions reflect a higher borrowing cost environment.
The latest Bank of England figures provide further context, with mortgage approvals for house purchases falling to 53,400 in September, below the previous six-month average of 58,800, while net mortgage borrowing declined to £3.9 billion against a six-month average of £4.9 billion.
Remortgage approvals increased from 34,000 to 42,600, demonstrating that activity remains stronger in some areas than others, but the overall picture is hardly one of a market enjoying particularly strong momentum. We are not, as a market, rocketing our way to the end of the year, or into 2027.
Not all these developments can be attributed to the Budget, given the influence of wider economic conditions, but they highlight why measures which could further restrict transactions deserve particular scrutiny.
Could the Budget discourage investment?
The decision to increase property income tax rates by a further 2% from April 2027 is another example, affecting landlords who hold properties personally in England, Wales and Northern Ireland, although those operating through limited companies will not be directly affected by this change.
While there is little reason to assume landlords will suddenly exit the market in significant numbers, the additional tax burden could influence future purchasing decisions, discourage investment or encourage some existing landlords to reconsider the properties they hold in their individual names.
That matters because the housing market requires a functioning rental sector alongside owner-occupation, and measures which encourage first-time buyers should not come at the expense of investment in rental housing.
It also raises questions about the cumulative impact of policies which individually may appear relatively modest, but collectively could reduce confidence, discourage transactions and make the market less active than it might otherwise have been.
Making every transaction count
There is clearly merit in helping more people purchase their first home, but a genuinely effective housing strategy also needs to encourage existing homeowners to move, support housing supply and maintain confidence across the PRS.
A Budget which avoids major surprises is not necessarily one which avoids negative consequences, particularly if opportunities to stimulate activity are missed while additional costs are imposed elsewhere.
For advisers, the implications of the OBR's forecasts are significant because a market generating fewer transactions than previously anticipated means every purchase opportunity becomes more valuable, while maintaining relationships with existing clients becomes increasingly important.
That should reinforce the importance of offering a comprehensive service rather than focusing solely on arranging the mortgage, particularly when additional services can improve the client experience and generate further income for the advice business.
Conveyancing is an obvious example, because introducing clients to a trusted conveyancing partner allows advisers to remain closer to the transaction, provide greater support and ensure customers are not left to arrange such an important element themselves.
At conveybuddy, we believe transparent pricing, a carefully managed conveyancing panel and ongoing case visibility should all form part of that proposition, allowing advisers to offer a more joined-up service while benefiting commercially from the introduction.
At its core, the success of this Budget's housing measures will be judged by whether they encourage greater activity across the market, rather than simply providing support to individual groups of buyers, and the OBR's latest outlook suggests there is considerable work still to do. If those forecasts prove accurate, advisers will need to make every transaction count, ensuring they offer clients the full range of services available, including conveyancing, rather than allowing valuable opportunities to pass them by.
