The UK housing market is bracing for interest rate uncertainty and loss of stamp duty revenue.

tom bill

Housing market activity is expected to slow over the next few months following the latest Budget.

Thanks to the government's borrowing and spending plans, mortgage borrowing is expected to increase gradually after October 30, which will almost certainly impact housing demand across the UK.

The five-year Treasury yield traded above 4.4% last week, compared to below 3.9% in early October.

Higher yields on government debt typically mean lower demand among investors due to the creditworthiness associated risks, which leads to higher mortgage costs.

The rate of return is significantly higher than the projected figures released by the Office for Budget Responsibility along with the budget. It was announced that the five-year maturity government bond yield will exceed 4% in 2027 and then rise to 4.4% in the second half of 2029.

“It’s been three weeks since the Budget was passed, but the government still needs to watch the reaction of financial markets very carefully,” said Tom Bill, head of UK housing research at Knight Frank.

“Financial markets last week priced the Bank Rate for December 2025 at between 4 and 4.25%, compared to expectations of below 3.5% just two months ago, as you can see in the chart,” he explained. “None of this is good news for the mortgage market and lenders have been pushing interest rates higher in recent days.”

According to Knight Frank, it will be several more months before the full impact is felt in the housing market, which has seen strong activity since the recent interest rate decline in late summer and early autumn. UK trading in September was the second highest in 18 months.

Bill continued: “Despite the optimistic outlook in last week's RICS survey, we expect the effect of rising interest rates to increase downward pressure on prices and volumes.

“The problem with this period of dyspepsia is that no one knows how long it will last or what form it may take.

“The election of President Trump in the United States has only added to the unpredictability of what will happen next in global bond markets.”

Meanwhile, major housing markets, where equity and cash play a more important role, face uncertainty of their own, Knight Frank reports.

Bill pointed out that the government's plans to replace the non-dome system would make the UK appear relatively uncompetitive compared to countries such as Italy to foreign investors and entrepreneurs.

He said: “The Foreign Investors for Britain lobby group is still talking to the government about the merits of introducing a parallel Italian-style flat tax to ensure capital stays in the UK.

“But the speculation has already had negative consequences for the country’s finances. If there are 22 billion black holes in the UK economy, Knight Frank estimates that the loss of stamp duty revenue on more than 5 million property transactions has made them 140.3 million larger since March.

“Former Prime Minister Jeremy Hunt first raised the possibility of abolishing the Bedom government in his spring budget and tensions over taxation of wealth and property have risen since then.”

Knight Frank used forecasting software to compare the actual number of offers against the expected number of over five million offers between March and October this year. Estate agents then calculated the number of lost transactions across the UK market.

Knight Frank estimates there is a shortfall of 107 transactions between 5 and 10 million transactions and 35 transactions above 10 million transactions, resulting in a theoretical stamp duty revenue loss of just over $140 million. A total of $11.6 billion was collected in stamp duty in the 2023/24 financial year.

Sadly, we are not surprised by the Conservative government's announcement that it will scrap the non-dom rule and the stamp duty cut between March and October (abolished as an ideological extreme) bookmarked in the Labor Budget on 30 October. Leslie MacLeod-Miller, CEO of Foreign Investors for Britain, told Knight Frank.

Our own research, compiled by Oxford Economics, found that Vidom paid an average of $890,000 in stamp duty over the five years to 2023/24 and $800,000 in value-added tax during the 2023/24 financial year.

With governments concerned about financial black holes, Bill believes they should keep a close eye on foreign investors and bond traders to ensure their revenue-generating plans are not thwarted.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos