As the Autumn Budget looms, fears of increased taxes on the private rental sector may prompt a surge in landlords selling off properties, according to a regional property agent. Gareth Overton, from Henry Adams, which operates across Hampshire, Sussex, and Surrey, has observed sustained activity in the summer property market, buoyed by increased stability and buyer confidence. However, the impending budget could signal a turning point, particularly for buy-to-let investors.

Overton noted, “The summer market has remained fairly active, with the stability we’ve seen providing a solid foundation for continued strong sales. The election results barely disturbed the market, with only a slight dip in viewings as the holiday season took hold.”

He expressed concern, however, about the potential impact of the upcoming Autumn Budget on landlords, particularly in light of possible changes to Capital Gains Tax (CGT). “With the budget approaching, we may see more significant shifts, especially among buy-to-let landlords who are closely monitoring potential CGT implications,” Overton added.

This concern comes as Chancellor Rachel Reeves hinted at a potential CGT increase, despite her broader aim to reduce the overall tax burden. Reeves emphasized the importance of balancing tax policy decisions, particularly to foster a favourable environment for businesses and workers. With many other tax increases ruled out by Labour, CGT is seen as a possible target for the October 30 Budget. The Office for Budget Responsibility projects that CGT will raise around £15 billion this year, increasing to £23.5 billion over the next five years.

Overton’s remarks were made in response to the latest Rightmove asking price index, which reported a seasonal price drop of 1.5% this month, equating to a decrease of £5,708, bringing the average asking price to £367,785. This decline, consistent with the August trend over the past 18 years, indicates that sellers at this time of year are often under pressure to sell and therefore price more competitively.

Rightmove suggested that, despite the usual seasonal dip, there is still a notable level of buyer interest, especially compared to the peak-mortgage-rate market seen last year. The recent Bank of England base rate cut, the first in four years, has already led to lower mortgage rates and boosted buyer activity. This has prompted Rightmove to revise its forecast for 2024, now predicting a 1% rise in asking prices, compared to an earlier projection of a 1% decline.

Tim Bannister, Rightmove’s director of property science, commented on the improved market conditions: “The first Bank Rate cut since 2020 has provided a welcome boost in buyer activity. While mortgage rates haven’t significantly decreased yet, the anticipation of further cuts and the current downward trend in rates are positive for those looking to move. As summer draws to a close, we’re set up for a more active autumn market.”

Since the rate cut on August 1, Rightmove has recorded a 19% increase in potential buyers contacting agents to view homes, compared to the same period last year. With these favourable conditions, the outlook for the autumn property market appears increasingly optimistic, though landlords remain wary of potential tax changes on the horizon.