The UK property market has cooled sharply in the weeks leading up to the autumn budget, with new seller asking prices falling amid widespread uncertainty over potential tax changes. According to new figures from property website Rightmove, the average asking price dropped by 1.8% in November, equivalent to £6,589, bringing the average listing price of a home to £364,833. Analysts say the decline reflects nervousness among both buyers and sellers as they await Chancellor Rachel Reeves’s budget announcement on 26 November.
Although November typically brings weaker pricing—Rightmove notes an average 1.1% monthly decline over the past decade—the current fall is the steepest for November since 2012. The data shows 34% of sellers reduced their asking prices, with the average reduction sitting at 7%, the highest since February 2024. Property market commentators, including television presenter Kirstie Allsopp, say uncertainty over possible stamp duty reforms has left “people in a panic,” causing many to delay moving plans until after the budget. The slowdown is especially pronounced in higher-value properties, where potential tax reforms could have the greatest impact.
Budget Rumours and High Stock Levels Weigh Heavily on Sales Activity
Rightmove’s property expert, Colleen Babcock, said the unusually large number of homes on the market is limiting price growth, as sellers fear overpricing in an already competitive environment. She added that the late timing of this year’s budget has created a prolonged period of uncertainty. “The budget is a big distraction,” she said. “Many would-be buyers are waiting to see how their finances will be impacted. It appears that the usual lull we’d see around Christmas has arrived early, and sellers keen to move are having to work especially hard to entice buyers with competitive pricing.” The website also noted that homes priced under £500,000 have been less affected by policy speculation, suggesting that the slowdown is concentrated in the mid- to high-end market.
Mortgage Lending Growth Expected to Slow Further in 2026
Alongside the softer property market, a separate forecast has warned of weakening mortgage lending in the coming years. The EY Item Club outlook for financial services predicts UK mortgage lending will grow 3.2% in 2025, but slow to 2.8% in 2026 as stretched affordability and stagnant real incomes reduce housing demand. EY said the banking sector is likely to face pressure from a “challenged global economy” and limited real income growth. Martina Keane, EY’s UK and Ireland financial services leader, noted that although the UK economy began 2025 strongly, momentum is now slowing. She warned that global uncertainty and the likelihood of domestic tax rises in the upcoming budget are expected to weigh on the sector next year. However, EY forecasts that this dip will be temporary, with a return to stronger growth across most financial services in 2027 and 2028.
Market Softness Follows a Year of Higher Rates and Flat Growth
The slowdown in asking prices follows months of subdued market activity driven by high interest rates, stretched affordability and only modest easing of inflation. Although the Bank of England has signalled that rate cuts could begin in 2026, borrowing costs remain significantly higher than pre-pandemic levels. Earlier this year, multiple estate agents reported rising stock levels and longer selling times as households became more cautious. With the government expected to outline reforms to taxes, spending and property measures in Reeves’s budget, many analysts believe the market will remain subdued until there is greater clarity on policy direction.
