"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. 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"
- Colleen Babcock - Rightmove
Average new seller asking prices have fallen by 1.8% this month, according to the latest data released by Rightmove, dropping £6,589 to £364,833. This November decline is larger than usual, as a record number of homes on the market combines with uncertainty over the upcoming Budget to slow seasonal price growth.
In addition, reductions on homes already listed have reached their highest level since February 2024, as sellers try to attract buyers hunting for bargains. The market is particularly unsettled at the upper end, where speculation over potential property tax changes is influencing buyer decisions:
Sales agreed for homes priced over £2 million, which could be subject to a potential mansion tax, are down 13% year-on-year.
Homes between £500,000 and £2 million, which may face changes to stamp duty or possibly capital gains tax, have seen an 8% decline in sales agreed.
Properties under £500,000 have been less affected, with sales agreed down only 4% year-on-year, likely impacted more by general Budget jitters than specific policy rumours.
Despite these month-on-month declines, the year-to-date figures remain positive, with sales agreed 4% higher than in the same period of 2024. Meanwhile, the average two-year fixed mortgage rate is 4.41%, down from 5.06% last year. Falling interest rates and rising wages have improved affordability, but further Bank Rate cuts and clarity on taxes are needed to restore confidence.
The November drop of 1.8% is notably larger than the 1.1% average fall over the previous ten years and is the biggest November decline since 2012. The combination of more homes on the market and uncertainty over how the Budget may affect finances is compounding the usual seasonal slowdown. Buyers appear distracted, leading some sellers to reduce prices more aggressively to attract attention. Over a third (34%) of homes currently listed have had asking price reductions, with an average drop of 7%, both the highest since February 2024.
“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," explains Colleen Babcock, property expert at Rightmove.
She continued, "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. 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.”
The top end of the market remains the most affected. Sales agreed for homes over £2 million, potentially liable for a mansion tax, are down 13% compared with last year. Growing speculation over higher taxes on these properties, which account for around 1% of the market, has prompted some buyers to delay decisions. New listings in this price bracket have also fallen 9%, a larger drop than in lower-priced sectors.
Homes priced between £500,000 and £2 million, which could face changes to stamp duty or capital gains tax on sales over £1.5 million, have seen sales agreed fall 8% year-on-year. This decline is smaller than for the £2 million+ sector but exceeds the 5% average monthly fall across all price ranges.
In contrast, properties under £500,000, making up roughly 75% of the market, have been more resilient. Sales agreed in this sector are down only 4% year-on-year. Although these homes are not directly affected by specific tax rumours, general Budget-related jitters appear to influence buyer sentiment. The October figures also compare to a strong month in 2024, when sales were boosted ahead of stamp duty increases in England from April 2025.
Mortgage trends are also in focus. The average two-year fixed rate is 4.41%, down from 5.06% last year, but rate reductions have been slower than expected during 2025. While the Bank Rate held steady in November, a cut in December could improve affordability and encourage market activity.
“Rumours of the contents of the forthcoming Budget are affecting the market, as we’re seeing greater hesitation in sales activity, especially at the upper end, which has been the focus of most of the discussion," said Babcock, "While there is also a general unease at how the Budget may impact personal finances, the majority of home moves would be unaffected by the rumoured changes to property taxes."
"Falling mortgage rates and rising wages have boosted buyer affordability, but the market also needs further Bank Rate cuts and less uncertainty about taxes. If we can see some mortgage rate reductions over the next few weeks, supported by a December Bank Rate cut, we could start 2026 on a positive note with the end of the prolonged Budget hiatus lifting the gloomy atmosphere of recent weeks,” she noted.
Matt Smith, Rightmove’s mortgage expert, added, “The Bank opted to maintain the status quo ahead of the widely anticipated Budget, but there’s still a good chance of another rate cut before the end of the year. We’re starting to see some notable weekly drops in rates, with some mortgage lenders offering headline-grabbing cheap rates as they compete for end-of-year business. Home-movers can expect some small drops in average mortgage rates to continue over the next few weeks. The Budget has created a lot of uncertainty and has had a big build-up, so once the announcements are out of the way, home-movers can focus on planning with more confidence.”
Industry opinions
Nick Leeming, chairman of Jackson-Stops, said, “For prime country houses, it has been a market of two halves in November so far. Whilst some have chosen to wait for clarity after the Budget, whatever news that may bring, others have accelerated their transaction timeframes in order to exchange before the 26th and avoid any surprises."
"Wider caution among buyers of higher valued property in the run-up to the Budget reflects the variety of trailed policies from the government, alongside a decade-high level of property listings softening sellers' pricing power. We saw a similar level of caution from the Bank of England’s decision to hold interest rates in November, just as movers wait with calculators in hand to see if a reset in tax could shift the numbers and impact any immediate plans."
“However, supply and demand still remain fundamentally stable across the national picture, reflected in relatively stable transaction figures and continued listings. Regional disparities are becoming more pronounced. We’re seeing unseasonably high enquiries in places like Exeter, Chester and Cornwall."
“For now, we have a balanced if cautious market, with a pragmatic commitment from buyers and sellers to move forward. The housing market can take comfort in continued completions and stable house prices. For those looking further ahead to an early 2026 move, getting your property ready for a new year move is a tactic that transcends political announcements. Those ready to adapt and take a long-term view will be best placed when the dust settles.”
Bertie Russell, managing director at Russell Simpson in London, comments, “Typically, the sales market in Prime Central London is made up of a variety of buyer segments with a wide range of nationalities, needs and requirements, with wealth created and held in a vast variety of industries and currencies. With the looming Budget, needs-based buyers are the top category of most active buyers in the market."
"We are starting to see more investors and pied-à-terre buyers looking, as well as a larger swathe of US buyers, who seem to be less impacted by tax changes from 2024 and less concerned about the impending 2025 Budget. The uncertainty created by the Budget is forcing some of the other segments to pause their search or hold off from making offers until there is confirmed news."
"Potential sellers are also waiting to see what happens before confirming their plans, meaning we are seeing fewer potential sellers than usual at this time of year and releasing fewer properties to market."
“Having experienced many elections, Budgets and other economic or political speed bumps like this in the past, the anticipation and the unknown have always been worse than the result. I would predict that this slight slowdown from buyers and sellers in the autumn market of this year will likely lead to a busy few weeks before Christmas and more definitive action taken by both buyers and sellers in the new year.”
