Chancellor Rachel Reeves (Image: Getty)
Budget and economic strategy is doomed to put the brakes on the market, regardless of figures showing the number of approvals made to home buyers reached the highest level since the summer of 2022 last month, one expert has warned.
Others have variously accused the Chancellor of “spraying weed killer on the green shoots of the recovery” and of creating “a real risk of economic slowdown”.
Some 68,300 approvals for house purchases were recorded in October, marking the highest monthly total since August 2022, when 72,200 mortgages got the green light.
Remortgaging approvals ticked up for the third month in a row, with 31,400 approvals recorded in October. The figures only capture remortgaging with a different lender.
The “effective” – the actual interest typically paid – on newly drawn mortgages decreased to 4.61% in October, the lowest since May 2023.
Simon Gammon, a managing partner at Knight Frank Finance, said: “October was a busier month as buyers and sellers sought to squeeze deals through ahead of the Budget, but sentiment has since taken a turn for the worst.
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Rachel Reeves delivered her Budget last month (Image: Getty)
“Most lenders hiked rates in the fortnight following the Budget, which will keep a lid on activity for the foreseeable. We expect rates to remain static through the new year at least, and we won’t see any more meaningful falls until the inflation data shows real improvements.”
The figures were released as data from HM Revenue and Customs () showed an estimated 100,410 home sales took place in October – 21% higher than October 2023 and 10% higher than September 2024.
Michelle Lawson, Director at Lawson Financial, said: “Though these figures display an air of confidence, ‘Wreck-It Reeves’ has put the brakes on the market.
“Given the number of problems she has created in the employment market, resulting in an inflationary impact, these numbers now look set to get worse.”
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Mortgage approvals are up – but brokers have issued a warning over Rachel Reeves’ strategy (Image: Getty)
Riz Malik, Independent Financial Adviser at R3 Wealth, added: “Rachel Reeves single-handedly sprayed weed killer on the green shoots of the market that were emerging before the Budget.
“We aren’t likely to see any movements for the remainder of 2024.
“Activity levels in November were a shadow of what they were in October.”
Craig Fish, Director at Lodestone Mortgages & Protection, emphasised that the UK housing market has “historically demonstrated remarkable resilience”, which he predicted would continue.
However, he stressed: “The challenges facing the economy are significant, and the strain is being felt across the board.
“With Rachel Reeves’ recent Budget, there is a real risk of economic slowdown, which could weigh heavily on market activity.
“As we move into 2025, transaction levels are likely to remain subdued, driven primarily by those seeking to complete before the stamp duty deadline.
“While there may still be pockets of positivity, the broader market faces considerable pressure in the months ahead.”