The UK housing market is showing signs of caution as more homeowners cut their asking prices ahead of the Autumn Budget.
Rightmove reports that asking price reductions have reached their highest level since February 2024, with over a third of properties on the market seeing price drops averaging 7 per cent.
This hesitation is particularly noticeable at the higher end of the market, where uncertainty over potential property taxes is making buyers and sellers alike think twice.
Across Britain, the average asking price fell by £6,589 in November to £364,833, marking a 1.8 per cent drop month-on-month and 0.5 per cent lower than the same time last year.
Expensive Homes Feel the Chill
Rumours of a mansion tax or other property-related levies are hitting the top end of the market hard.
Sales agreed for homes over £2 million have fallen 13 per cent compared with last year, while the number of new listings in this bracket is down 9 per cent.
Properties priced between £500,000 and £2 million have also seen sales dip by 8 per cent.
Colleen Babcock from Rightmove explains: “Rumours about the Budget are making buyers hesitant, especially at the upper end.
While most moves wouldn’t be affected by property taxes, the talk alone is enough to slow activity.”
The Lower End of the Market Holds Steady
For homes under £500,000, which make up roughly three-quarters of the market, the slowdown has been less severe. Sales fell just 4 per cent compared with last year.
Rightmove attributes this to general Budget jitters rather than specific tax fears, with seasonal factors like the early Christmas lull also affecting transactions.
Regional Price Drops
Some regions are seeing sharper declines than others.
Scotland experienced the steepest month-on-month fall at 3.2 per cent, bringing the average price to £194,037.
In the South East, prices dropped 2.7 per cent to £467,271, while London saw a 2.4 per cent decline to £669,040.
Nick Leeming, chairman of Jackson-Stops, notes that caution among buyers of expensive properties is amplified by both government policy discussions and the record-high number of listings, which softens sellers’ bargaining power.
Mortgage Rates and Affordability
Despite these price dips, falling mortgage rates and rising wages have helped buyers’ affordability.
Babcock adds that further base rate cuts and clarity on taxes could rejuvenate the market, potentially giving 2026 a strong start.
Data from Reallymoving shows that moving costs in England have risen by 27 per cent in the past year, with upfront expenses now averaging £17,831 compared to £14,000 a year ago.
Proposed Tax Changes on the Horizon
The Government is reportedly considering several changes ahead of the Autumn Budget: replacing stamp duty with a national property tax, introducing a mansion tax, and swapping council tax for a local property levy.
These proposals are largely responsible for caution at the upper end of the market.
Acting Quickly on Mortgages
Homebuyers and those remortgaging are advised to act promptly.
Locking in a mortgage rate early can provide certainty, whether for a new purchase or for landlords with buy-to-let properties.
Fee-free brokers like L&C can help navigate the many options and secure competitive deals before rates fluctuate further.
Advice for Buyers and Landlords
For homebuyers, it’s important not to overstretch budgets, especially with potential price drops looming.
Buy-to-let landlords with interest-only mortgages face higher monthly costs, making early action on remortgaging crucial.
Expert advice can help borrowers understand the implications of fees and interest over the term of a mortgage, ensuring informed decisions.
Market Outlook
While the market is cautious ahead of the Autumn Budget, affordability is supported by lower mortgage rates and wage growth.
If tax clarity and further rate cuts arrive, experts believe the UK housing market could rebound quickly in 2026, lifting the current gloom and restoring confidence among buyers and sellers alike.
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