Budget speculation cools housing market activity

Average seller asking prices for homes have slipped by 1.8% this month, dragging the national figure to £364,833 and signalling an unusually sharp November slowdown, Rightmove reveals.

It says the drop is the steepest November house price fall since 2012 with a crowded market and nervousness over the coming Budget affecting confidence.

Sellers are cutting more deeply and asking price reductions now at their highest level since February 2024.

The property platform says that more than a third of homes are seeing a markdown with the average drop of 7%.

It’s a buyers’ market

The firm’s property expert, Colleen Babcock, said: “The decade-high number of homes available on the market continues to restrict price growth, with many new sellers keen to avoid standing out by over-pricing compared with their competition.

“The Budget is a big distraction, and is later in the year than usual, with many would-be buyers waiting to see how their finances will be impacted.”

She added: “It appears that the usual lull we’d see around Christmas time has arrived early this year, and sellers who are keen to move are having to work especially hard to entice buyers with competitive pricing.

“This means that average new seller asking prices are now 0.5%, or £1,759 cheaper than a year ago.

“In addition, a third of homes already on the market for sale have had their asking price reduced, with an average reduction of 7%, further illustrating that this is a buyers’ market.”

Prime homes struggle to sell

Rightmove found that the top end of the housing market is the most unsettled with sales hit by talk of new taxes.

Sales agreed for homes priced above £2 million have fallen by 13% compared with last year.

New listings in this band are also down by 9% with many potential buyers pausing their purchasing plans.

Homes costing between £500,000 and £2 million are also seeing a drop in in buyer interest.

Agreed sales are down

Rumours of stamp duty changes in England and potential capital gains tax tweaks are prompting an 8% annual fall in sales agreed.

Activity remains weak across much of the upper market, even though these figures are set against strong trading conditions at this time last year.

Below £500,000, the market is holding up better, Rightmove says.

Sales agreed are down by 4% year on year with the segment appearing less worried about tax policy speculation.

The number of sales agreed so far this year is 4% higher than during the same period in 2024.

Sharp seasonal slowdown

Mary-Lou Press, the president of NAEA Propertymark, said: “The market is increasingly cautious as speculation over the upcoming Budget fuels uncertainty.

“When buyers and sellers face mixed signals about potential tax changes, it’s natural to see hesitation and a sharper seasonal slowdown than usual.

“While efforts are supported to ensure stability and fairness within the housing market, continued rumours of major reforms, from Stamp Duty and Capital Gains adjustments, to a potential mansion tax, risk undermining confidence and discouraging transactions.”

She adds: “Despite softer sentiment in the higher-value sectors, the broader picture remains more resilient, helped by gradually improving mortgage rates and better affordability.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “These figures, though of course reflecting asking rather than sale prices, reinforce the message given by recent improving mortgage approval numbers, as well as what we’ve seen on the ground.

“Seller expectations have inevitably softened with budget tax increases certainly on the way and so much more choice of property for buyers.
“However, our sale prices have certainly not collapsed.”

He added: “The overwhelming majority of existing sales are continuing, albeit more cautiously, while both parties seek to find a ‘new normal’.”

Tomer Aboody, a director of specialist lender MT Finance, said: “With the never-ending negative sentiment surrounding the budget, sellers are reducing their price expectations in order to encourage buyer interest.

“As the Budget looms, and with it the potential of multiple parts of the market being impacted, many would-be buyers are playing the waiting game to see what the fallout is and the impact on their own purchases.

“Hopefully, another rate reduction in forthcoming months will help reduce the impact of any increases in stamp duty or inflation.”