: “I don’t think there are currently any incentives to buy or move home,” she said. Reuters/Henry Nicholls
12:26 PM, September 1, 2025
Rachel Reeves, the shadow chancellor, has warned that there are no incentives for people to buy or move home under the current government.

Speaking at a conference, Reeves argued that policies such as the mortgage guarantee scheme had failed to encourage buyers. She also criticised the governmentS handling of the housing crisis, saying that it had created a situation where many people are unable to afford to get on the property ladder.

“I don’t think there are currently any incentives to buy or move home,” Reeves said. “The mortgage guarantee scheme hasn’t worked, and the government has failed to address the underlying issues in the housing market.”

Reeves added that Labor would prioritise increasing housebuilding if it wins the next election, as well as making it easier for first-time buyers to get on the housing ladder.

Her comments come as the housing market continues to slow down, with house prices falling and mortgage rates rising.Experts are warning that the market coudl be in for a prolonged period of weakness.The latest data shows that house prices fell by 0.2% in August, according to Nationwide. This follows a 0.2% decline in July,marking the third consecutive month of falling prices.

Mortgage rates have also been rising,with the average two-year fixed-rate mortgage now at 6.5%. This is up from 6.2% last month,according to Moneyfacts.

The combination of falling house prices and rising mortgage rates is making it more challenging for people to afford to buy a home. this is especially true for first-time buyers, who are already struggling to save for a deposit.

Reeves’ warning is likely to add to concerns about the state of the housing market.With the general election just around the corner, the issue of housing is likely to become even more prominent in the political debate.

What specific economic factors, beyond mortgage rates, are contributing to homeowner hesitancy regarding selling or relocating?

Lack of Incentives to Buy or Move Homes Raises Concerns, Reeves Warns

The Stalling Housing Market: A Deep Dive

Recent warnings from Governor Reeves highlight a growing concern: a meaningful lack of incentives is stifling both home buying and relocation within the housing market. This isn’t simply a regional issue; it reflects a broader national trend impacting real estate, homeownership, and the overall economy. The core problem? A confluence of factors making it financially unattractive for many to make a move.

Understanding the Incentive Gap

For years, homeowners have benefited from historically low interest rates. The rapid rise in mortgage rates over the past 18 months has dramatically altered this landscape. Many are “locked in” to these lower rates, creating a disincentive to sell and purchase a new home at a significantly higher rate. This phenomenon is often referred to as the “mortgage rate lock-in effect.”

The Rate Differential: The difference between current mortgage rates and existing homeowner rates is substantial. This makes upgrading, downsizing, or relocating a costly proposition.

Limited Housing Supply: While inventory is slowly increasing in some areas, the overall housing inventory remains constrained. this keeps prices elevated, further exacerbating the affordability crisis.

economic Uncertainty: Concerns about a potential recession and job security are also contributing to homeowner hesitancy. People are less likely to make major life changes during times of economic instability.

affordability Challenges: Even with modest price reductions, the higher mortgage rates significantly increase monthly payments, pushing homeownership out of reach for many.

Delayed Homeownership: Many potential buyers are delaying their purchase plans, hoping for rates to fall or prices to soften.

Rental Market Pressure: Increased demand in the rental market due to fewer home sales is driving up rental costs, creating a double bind for those unable to buy.

State-Level Responses and Potential Solutions

Governor Reeves’ warnings are prompting discussions about potential state-level interventions. While direct financial incentives are often considered, they can be costly and may not address the root causes of the problem.

Property Tax Relief: some states are exploring temporary property tax relief measures to offset the higher mortgage costs.

Down Payment Assistance Programs: Expanding existing down payment assistance programs can help first-time buyers overcome the initial hurdle of saving for a down payment.

Zoning Reform: Addressing restrictive zoning laws to increase housing density and supply is a long-term solution that coudl significantly impact affordability.

Innovative Financing Options: Exploring alternative financing options, such as shared equity mortgages or rate buydowns, could help make homeownership more accessible.

The Role of second-Hand & Vintage Furniture in a stagnant Market

Interestingly, a slowdown in the housing market frequently enough correlates with increased interest in second-hand furniture and vintage home decor. As people postpone moves, they are more likely to invest in refreshing their existing spaces rather than undertaking costly renovations or purchasing new furniture for a new home. Platforms like 2nd home are seeing increased activity as consumers seek affordable and sustainable ways to update their homes. This trend highlights a shift in consumer behavior – a focus on maximizing value and minimizing expenses during times of economic uncertainty.

Case Study: The Impact in Austin, Texas

Austin, Texas, experienced a dramatic housing boom during the pandemic, followed by a significant slowdown.The city saw a surge in home prices and a corresponding increase in property taxes. As mortgage rates rose, the market cooled considerably, leaving many homeowners “underwater” or hesitant to sell.This situation demonstrates the vulnerability of markets that experienced rapid appreciation and the challenges of adjusting to a higher interest rate surroundings. The Austin example underscores the need for proactive policies to address affordability and prevent market bubbles.

Looking Ahead: Forecasting the Future of the Housing Market

Predicting the future of the housing market is always challenging. however, several factors will likely shape the coming months:

1. Federal Reserve Policy: The Federal reserve’s decisions regarding interest rates will have a significant impact on mortgage rates and overall market activity.
2. Economic Growth: A strong economy will support housing demand, while a recession could further dampen the market.
3. Housing Supply: Continued efforts to increase housing supply are crucial to addressing the affordability crisis.
4. Demographic Trends: Shifts in population and household formation will influence housing demand in different regions.

The lack of incentives to buy or move homes is a complex issue with far-reaching consequences. Addressing this challenge requires a multifaceted approach involving government policies,innovative financing solutions,and a commitment to increasing housing supply. Ignoring these concerns could lead to a prolonged period of stagnation in the real estate market and further exacerbate