UK property asking prices down £2,000 from a year ago

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Asking prices for houses in the UK are £2,000 lower than they were at the end of last year following uncertainty over a rise in property taxes in the run-up to the Budget.

Rightmove said on Monday that the average price of a property put on the market in the four weeks to December 6 was £358,138, which was 0.6 per cent – or £2,059 – lower than the same period last year. In contrast, last year ended with an average asking price £5,000 higher than it was at the end of 2023.

This comes after a larger than usual decline in asking prices between November and December of 1.8 percent. While there is usually a decline in December, this year’s price decline was higher than the average decline over the past 10 years of 1.4 percent.

Chancellor Rachel Reeves’ Budget on 26 November introduced a ‘mansion tax’ surcharge on properties worth more than £2m, as well as a two percentage point increase in property income tax rates.

But speculation about upcoming property tax rises was already circulating in August, contributing to more muted activity throughout the second half of the year, Rightmove data showed.

“The weeks of speculation leading up to the Autumn Budget have certainly cooled the property market, especially for those making discretionary moves,” said Claire Reynolds, head of UK sales at property consultancy Strut & Parker.

The number of new sellers coming to the market in the second half of 2025 was 4 percent lower than in the same period last year, after being 9 percent ahead year-on-year in the first half.

Likewise, the number of potential buyers contacting estate agents was 6 per cent lower in the second half of the year than in 2024, after being 3 per cent higher in the first six months.

Rightmove said four-bedroom detached homes and properties with at least five bedrooms recorded the biggest monthly price decline, falling by 2.4 per cent to an average of £642,131 in December.

Asking prices for properties with two bedrooms or fewer fell by a smaller 1.4 percent.

These figures are based on around 66,000 asking prices for properties offered for sale by estate agents and advertised on the Rightmove portal.

However, financial markets believe there is a high probability that the Bank of England will cut interest rates by a quarter of a percentage point to 3.75 per cent on Thursday, which would help bring down mortgage interest rates.

Improving buyer affordability and plenty of choice for buyers also point to a pickup in activity in 2026, according to Rightmove, which expects new seller asking prices to rise by 2 percent over the year.

“With market conditions supporting higher levels of activity, and hopefully a more certain economic environment, we expect a better year for price growth in 2026, with a strong rebound in activity to start the year,” said Coleen Babcock, property expert at Rightmove.

The asking price forecast is largely in line with estimates published Monday by lenders Nationwide and Halifax.

Nationwide expects home prices to rise 2-4 percent in 2026, with affordability gradually improving through income growth outpacing home price growth and a further modest decline in interest rates.

Meanwhile, Halifax said it expects growth of 1-3 per cent next year.

“While wage growth is expected to slow and unemployment rates may rise, lower interest rates and easing inflation should help gradually improve the purchasing power of homebuyers,” said Amanda Bryden, president of Halifax Mortgage.