This comes after Halifax’s August index, released Friday, showed UK house prices increased last month at their fastest annual pace since late 2022, up 4.3% year-on-year
UK house prices rose in August, according to an industry survey, which found the number of new properties being listed on the market also increased amid fears of a capital gains tax hike in the upcoming autumn budget.
The RICS August residential market survey showed that its net price balance, which acts as a leading indicator for other house price indexes, had increased +1 following nearly two years of declines.
Surveyors also expected this to continue, with a +14 net balance of respondents to the survey predicting a steady increase in prices over the next three months.
This comes after Halifax’s August index, released Friday, showed UK house prices increased last month at their fastest annual pace since late 2022, up 4.3% year-on-year. This took the average house price up to £292,505 in August.
Amanda Bryden, head of mortgages at Halifax, said the growth built on a largely positive summer for the UK housing market. Prospective homebuyers are feeling more confident thanks to dropping interest rates.
The BoE is due to announce its next interest rate decision next week, having decided to reduce its base rate to 5% in August.
Data from property platform Rightmove released last week, showed that the proportion of former rental homes going up for sale had hit a record high, indicating that more landlords were selling up. Rightmove cited the mooted rise in capital gains as a potential driver.
There is currently a £3,000 tax-free allowance on capital gains, after which there is an 18% capital gains tax applied on residential property sales for basic rate taxpayers and 24% for those in the higher rate tax band. The Treasury has reportedly drawn up plans to align capital gains rates with income tax.
Think tank Resolution Foundation said that making changes to capital gains, as well as inheritance tax and national insurance, could help Reeves raise more than £20 billion.
Apart from increasing house prices, the latest RICS residential market survey showed that buyer demand and sales activity had also been on the rise in August.
Simon Rubinsohn, chief economist for RICS, said: Anecdotal remarks from respondents still demonstrate the need for realistic pricing to get deals done with uncertainty both around the scope for further interest rate reductions and the likely contents of the forthcoming budget keeping the mood in check.