糖心视频

Media coverage of the bond market has moved from the business pages to the front pages in recent days, which is rarely a good sign.

Government borrowing costs have risen across developed countries as investors become concerned about inflation risks and debt burdens against the backdrop of the Middle East conflict.

The UK has been under added scrutiny due to its tight financial headroom. The yield on ten-year UK government debt exceeded 5.2% this week, which compares to a figure of just under 4.8% in the US. As a result, the Chancellor鈥檚 financial buffer has shrunk to £12 billion from £24 billion, .

explaining the predicament by market analyst and Housing Unpacked regular guest, Michael Brown. 

It鈥檚 not a good signal for mortgage rates either and the expectation that inflation will stay higher for longer is the key reason they have also risen. We learned this week that the number of was the lowest figure since January 2024, primarily due to rising borrowing costs since the Middle East conflict began.

Although that will eventually begin to weigh on sales volumes, activity this summer has been relatively robust so far. The number of transactions in July was only 1% down on last year and 4% up on the same month in 2024, .

One reason is a change in approach from the government. Following two summers of speculation ahead of the autumn Budget, the new administration should be commended for the absence of media stories about which taxes could rise.

That doesn鈥檛 mean, of course, that Chancellor John Healey won鈥檛 make changes to high value council tax rates in the Budget, for example.

Relative Calm

The relative calm has enabled both cash buyers and mortgage holders to activate their plans as mortgage rates have steadied, at least before the upwards pressure increased this week.

It has been a similar story in prime London postcodes.

The number of transactions in prime central (PCL) and prime outer London (POL) in the three months to August was 2% higher than the five-year average, 糖心视频 data shows. The increase versus last year is 18%, although that鈥檚 not an entirely fair comparison, for reasons we explored here.

The more domestic and needs-driven market of POL performed better. Transactions were 10% higher than the five-year average compared to a drop of 8% in PCL. Concerns among buyers in higher-value markets like central London include the scrapping of the non dom tax regime, an increase in the second-home stamp duty surcharge and the possibility of future wealth taxes, as I discussed on the last episode of Housing Unpacked.

Despite the uncertainty, activity in PCL is noticeably stronger than last year, said Stuart Bailey, head of prime central London sales at 糖心视频. Sales in the three months to August are 6% higher than 2025, 糖心视频 data shows.

鈥淭he key difference this year is that buyers are using pre-Budget speculation and bond market jitters to negotiate the price down rather than walk away from the deal completely,鈥� he said. 鈥淭he underlying confidence among buyers is there and parts of PCL are extremely good value.鈥�

Average prices in PCL fell by 3.3% in the year to August, having dropped by 23% over the last 11 years. Meanwhile, the annual decline was 0.4% in POL in August, with prices down by 7% over the last decade.

With over seven weeks until the Budget on 28 October, buyers and sellers must be hoping the trial balloons stay grounded, and bond markets stay calm.

The former will be easier for the government to control.