Financial confidence among UK homebuyers remains strong with eight in 10 confident that they will be able to afford their next purchase, despite concern in the rental sector over price increases, research from OnTheMarket says.
The residential listings business, which is owned by CoStar, has published its Property Sentiment Index, which surveyed 2,500 active property seekers.
It found that interest rates were top-of-mind, as the Bank of England dropping its base rate to 4% from 4.75% earlier this year, led 30% of property hunters to alter their search criteria.
House hunters were most susceptible to changes in price ranges, with 13% altering their price bands and location, with 6% switching the location of their search. This was closely followed by the number of bedrooms people were hoping to find, as 4% altered their search based on the bedrooms available. Some of those opting to reform their criteria said it was for "other" reasons, including making the decision to rent as opposed to buy.
There was no consensus on the future of interest rates, according to the data which found a quarter of property seekers think rates will keep dropping, with just over a third maintaining that they will hold at their current level. Of the remainder, 17% think the rates are set to climb further, while 23% were unsure of what the future holds.
Buying
The public expects sales and rental prices to increase over the next year but those planning to buy or sell remain confident about their ability to do so in under six months, the study found.
This confidence extended to around 52% of prospective buyers who are very confident in their ability to afford the purchase of their next home, compared with 15% who said they do not feel very confident.
This translated to continued strong interest in new-builds among property seekers, with around 42% saying they were likely to consider buying a new home, down from 46% in June. Conversely, 39% said they were unlikely to consider one, up from 37% in June.
The end of the stamp duty holiday in March 2025 triggered questions about the future of the UK property tax system and which of the proposed ideas had resonated most. Opinions on what should replace the current system remained divided as 30% of those surveyed were unsure but 12% of respondents were keen for it to remain unchanged. A quarter were in support of “keeping the same criteria but spreading payments over several years rather than requiring them up front,” the study showed.
When it came to the most recent suggestion of a tax on properties valued over £500,000, with a higher rate for those worth over £1 million, around 21% of respondents were in favour. Additionally, 12% said they were not in support of any of the three options.
Rentals
Data showed respondents were united on expected rental price increases, with 67% predicting a jump in price, a similar proportion to June where 65% predicted an increase due to an ongoing supply and demand imbalance. Around 15% believed rental prices will remain stable, with 5% expecting prices to fall.
This did not affect overall confidence in the ability to find a rental property among those surveyed, with half confident in their ability to find and secure an offer on a rental property within three months and an additional 30% expecting it to take between three and six months. Comparatively, 6% predicted a wait of over a year.
The property search engine found the most searched for property types among buyers were detached houses are the most popular choice at 28%, followed by bungalows at 23%. Of the remaining searches, semi- detached houses accounted for 17% with flats standing at 15%.
According to the data, renters favoured flats at 55% of filtered searches, while detached demand for detached and semi-detached houses stood at 12% each, followed by bungalows and terraced houses at 9% respectively.
Jason Tebb, the president of OnThe Market, said: "This edition of the OnTheMarket Property Sentiment Index reveals a confident outlook among buyers, sellers, and renters, with most expecting to transact within three to six months. While overall sentiment remains positive, it is clear that there is growing public appetite for reforming the property tax system. Despite economic uncertainty, financial confidence among buyers is high, and sentiment towards house prices remains steady."