From a housing market analysts’ perspective, the sense of anticipation during the Advent season is likely to pale into insignificance, in comparison to the fervent speculation that built up in the weeks prior to this year’s Budget.

As it was, the untimely release of the OBR report before the Chancellor rose to the despatch box, was akin to watching someone else unwrap all your presents on the night before Christmas.

Rather like the prospect of a present from a great aunt or uncle, expectations were set low.

Council Tax surcharges

For the owners of prime properties, the introduction of a High Value Council Tax Surcharge for £2m+ homes (effective from 2028 across England) would have felt like avoiding food poisoning after eating four-day-old turkey curry. However unappetising the charges that have been introduced, a full-blown ‘mansion tax' was avoided.

Early evidence is that in response, those people who put their plans on hold are coming back to the market. However, they remain price conscious, especially around the newly created tax thresholds.

To find out more about the surcharge and what it means for the prime market, you can watch our recent webinar. Otherwise, more details on the surcharge and how it will operate can be found on the government website.

Another 2p in the £1 for landlords

The other main property-specific measure in the Budget, was the imposition of higher income tax charges on rental income, with two pence in the pound added to the tax on investment income coming into effect from April 2027. Coming so soon after the enactment of the Renters’ Rights Act (south of the border at least) this will have left many landlords reaching for the eggnog, somewhat earlier than expected.

As discussed in our latest blog, we expect this to hasten the restructuring of the rental market to larger, wealthier landlords. You can listen to me discussing what the change in rental regulation means for landlords with Lauren King of Mishcon de Reya.

And in other news…

Meanwhile the ONS tells us that the headline rate of inflation came in at 3.6% in October, boosting hopes that it has peaked. At the same time, economic growth came in at just 0.1% in the three months to September as wage growth - though still relatively high - moderated to 4.6% .

Collectively, that makes a Bank Base Rate cut more likely than a White Christmas, when the MPC next meet on 18 December.

And yet, the Nationwide reported that mainstream annual house price growth remained stuck at just +1.8% in November, while HomeLet similarly put annual rental growth at 2.3%. So, as unwanted presents start to get listed on eBay, we expect the housing market to remain price sensitive, even though the worst fears regarding tax payable at the top end appear to have been avoided.