Asking prices for property fall

Introduction

The UK housing market has entered a phase of unusually early seasonal slowing, clouded by the impending 2025 Autumn Budget and widespread speculation about changes to property taxation. According to the latest data from Rightmove, average asking prices for homes coming to market in November 2025 fell by 1.8 % month-on-month (equivalent to about £6,589) to £364,833. (The Guardian) This represents the biggest November drop for this time of year since 2012. (Rightmove)

It’s not simply a seasonal effect. The combination of record-high inventory, a “wait and see” mentality among buyers and sellers, and heightened concern around potential tax and regulatory changes have created a more pronounced slump than usual. The upper-end of the market, in particular, appears most exposed. Recent data from Zoopla and the Royal Institution of Chartered Surveyors (RICS) support the picture of market participants holding back until clarity arrives. (MoneyWeek)

In this article we will explore the numbers in detail, unpack the various drivers of the slowdown, examine the specific tax-policy risks and structural issues at play, analyse the likely regional and segmental differences, and discuss what this means for buyers, sellers, investors and the rental market in the coming months.

1. The current state of the market: data and dynamics

1.1 Asking-price movement

The headline figure from Rightmove: average new seller asking prices fell 1.8 % in November to £364,833. (Rightmove) The normal average drop for November over the past decade has been about 1.1 %. (Rightmove)

Breaking it down:

First-time buyer sector: £225,128 average asking price, down 0.8 % month-on-month. (Rightmove)
Second-stepper cohort: average £340,515, down 1.0 %. (Rightmove)
“Top of the ladder” (excludes inner London) average £657,758, down 2.7 %. (Rightmove)

In addition: around 34 % of homes on the market have had their asking price reduced at least once, and the average size of the reduction is about 7 %. These are among the highest levels seen since early 2024. (Rightmove)

1.2 Sales activity & market supply

While the asking-price drop is a sign of sellers being more cautious, other indicators point to weakened demand and elevated supply. For example:

The RICS survey reports buyer demand, agreed sales and new vendor instructions all falling deeper into negative territory, with many respondents attributing this to “holding patterns” ahead of the Budget. (Estate Agent Today)
Zoopla data show that in higher-value segments (homes above £500,000 or £1 m+) buyer demand and new listings are down significantly. (MoneyWeek)
Rightmove also notes that the number of homes available for sale is at a decade-high level, which is placing downward pressure on prices. (Reuters)

1.3 Year-on-year comparison

Although the month-on-month drop is marked, some parts of the market remain relatively stable: according to Rightmove, average asking prices are only 0.5 % lower than a year ago. (Reuters) The year-to-date number of sales being agreed is reportedly 4 % above the same period in 2024. (Rightmove)

This suggests that the November dip is more about timing, sentiment and uncertainty than a full-blown collapse—at least for now.

2. What’s driving the slowdown?

Several inter-locking factors appear to be influencing the current market environment. Below we detail the most significant ones.

2.1 Budget and tax policy uncertainty

Perhaps the most prominent driver of the pause is the build-up of uncertainty ahead of the Autumn Budget, when the government is expected to announce changes to property taxation. Sellers and buyers alike are reportedly adopting a “wait and see” stance. For example:

Many potential buyers are delaying decisions until after the Budget to see how their financial position might be affected.
Some sellers may be bringing listings forward to avoid being caught by anticipated tax changes.
Agents report that the Budget is acting as a distraction from the usual market rhythm, making this year’s November slowdown arrive earlier and more sharply than typical. Rightmove notes: “The Budget is a big distraction … the usual lull we’d see around Christmas time has arrived early this year.” (Rightmove)

What tax-policy changes are speculated? Among the key possibilities:

Reform of Stamp Duty Land Tax (SDLT): There is talk of scrapping or replacing stamp duty with a new form of property tax on homes above a certain price threshold (e.g., £500,000). (S&W)
Introduction of a “mansion tax” or additional tax burden on high-value homes (over £2 million, or £1.5 million) with potential removal of the main-residence exemption from Capital Gains Tax (CGT). (MoneyWeek)
Reforms to Council Tax and other property-related levies (for example, doubling council tax for top bands) to shift more tax burden onto homeowners. (HomeOwners Alliance)

This speculation is particularly unsettling for the upper echelons of the market, where the tax burden may significantly change. For many householders and investors, the risk of a policy change—especially if back-dated or applied to existing holdings—makes postponing decisions a rational strategy.

2.2 Elevated supply and increased competition among sellers

When there are more properties on the market, sellers must compete harder for buyer attention, which can compress asking prices. Rightmove notes the number of homes available for sale is at a decade-high, restricting upward price momentum. (Rightmove)

In addition, many new sellers are entering the market around this time (pre-Christmas), potentially because they want to move ahead of fiscal changes. The increased volume contributes to buyer choice and gives buyers more leverage.

2.3 Mortgage cost and affordability pressures

Although mortgage rates have come down somewhat from their peaks, affordability remains challenging for many buyers. Rightmove’s data show that the average 2-year fixed mortgage rate is 4.41 %, compared with 5.06 % a year earlier. (Rightmove) But mortgage costs are only one part of the story—other factors such as wage stagnation, real-income erosion, and cost-of-living pressures mean that many buyers are cautious.

In the context of higher borrowing costs, even a small uptick in tax or regulatory burden may shift the calculus of whether to transact now or wait.

2.4 Regional and segmental differentiation

Not all parts of the market are affected equally. The data suggest that higher-value sectors (homes over £500,000, or £1 m+) are more impacted by the uncertainty than the more affordable segments. For example: in the higher-value market, buyer demand is down 4 % or more, while new listings have fallen 7 %. (MoneyWeek)

Conversely, homes priced under £500,000 appear to be less impacted so far. Rightmove notes that this segment has been less affected by potential policy-change rumours. (The Guardian)

2.5 Seasonality and timing

Typically, the housing market in the UK slows as it approaches the Christmas period. Sellers and buyers often pause or push into the new year. Historically, November tends to see a drop of about 1.1 % in asking prices. (Rightmove) What is different this year is that the drop arrived early and is steeper, likely due to the above factors rather than purely seasonal causes.

3. Segment and regional analysis

Understanding how the slowdown plays out across different market segments and regions is crucial for those who buy, sell or invest.

3.1 Price segments

Lower and mid-market (sub-£500,000):
This segment remains comparatively resilient. Rightmove and other sources suggest that homes priced under £500,000 have seen less of an impact from tax speculation and buyer caution. (The Guardian) For owner-occupiers trading up or first-time buyers, the calculus remains somewhat more stable because the tax-policy risk is lower (or perceived as lower) and the pool of buyers is larger.

Premium market (£500,000-£2 million and above):
Here the impact is sharper. According to MoneyWeek, sales in the £500,000–£2 million range are down 8 % year-on-year, while homes above £2 million are down 13 %. (MoneyWeek) Demand is weaker, and sellers are more likely to reduce asking prices or delay listing. Zoopla reports demand for homes over £1 m is down 11 %, and new listings down 9%. (MoneyWeek)

The logic is straightforward: higher-value homes are more exposed to tax changes (mansion tax, CGT, SDLT reform), and for many buyers the incremental cost or risk makes the deal less attractive. Also, luxury homes tend to have longer transaction cycles and less standardised demand, so sentiment matters more.

3.2 Regional variation

Regional differences add another layer of complexity. While national averages tell part of the story, local dynamics diverge:

London and the South East: These regions tend to have higher proportions of high-value homes, international buyers and investors, and therefore are more sensitive to tax and regulatory changes. The holding-pattern behaviour is more pronounced in these regions.
Midlands, North, and other regions: Some of these may see relatively stronger demand (especially for sub-£500,000 homes) if affordability improves, mortgage rates drop or supply remains constrained.
Supply constraints and local planning issues: Regions where housing supply is particularly tight may resist the broader downward pressure more effectively, although elevated supply still matters.

3.3 Investors and buy-to-let landlords

For investors and landlords the picture is nuanced. Much of the commentary around the Budget speculates about changes to CGT, SDLT, and restrictions on landlord reliefs. According to Property Investors Network, the central concerns include:

Increased CGT for property sales, possibly aligning it with income tax rates. (property investors network)
Changes to SDLT or its replacement.
Additional regulatory burdens (tenant protections, digital tax reporting).

This uncertainty may lead some investors to pause acquisitions or sales decisions until clarity is provided. It may also accelerate exits from the market for smaller landlords, increasing supply of rental properties and perhaps pushing up rents over time.

4. Policy and structural issues behind the scenes

It’s important to recognise that the current market slowdown is not just about short-term tax waiting game; there are deeper structural dynamics too.

4.1 Housing supply and planning

One long-standing issue in the UK housing market is limited housing supply relative to demand. The Office for Budget Responsibility (OBR) has noted that the impact of Government residential-planning reforms over the next few years is uncertain. (Office for Budget Responsibility) Without addressing supply bottlenecks, tax changes alone won’t stabilise affordability. In fact, the commentary by some analysts suggests that simply scrapping or reducing SDLT would not solve the underlying affordability challenge. (Insider Media Ltd)

4.2 Tax policy and behavioural responses

Tax policy inevitably influences behaviour—both of buyers and sellers. Some key points:

If SDLT were removed or heavily reduced, some buyers might rush into the market—raising transaction volumes and possibly prices—only for the effect to reverse when the tax is re-introduced or supply constraints bite. (Insider Media Ltd)
Introducing new taxes (CGT, mansion tax, higher council tax) may deter activity, particularly among higher-value homes and investors.
Changing the tax regime introduces risk-premia: buyers may discount price (or postpone) to allow for the possibility of higher future costs.
For sellers, the prospect of new taxation may prompt early listing or price reductions to ensure completion before new rules hit. We are seeing signs of that with asking-price cuts and higher volumes of supply.

4.3 Macro-economic pressures

Beyond housing-specific factors, macro issues are also relevant:

Real income growth is under pressure given inflation, cost of living, and global uncertainty. That limits buyer affordability.
Mortgage rates, while lower than a year ago in some cases, remain historically elevated compared to the 2010s, so financing costs remain a drag.
The broader economy is slowing: according to EY’s Outlook, UK mortgage-lending growth is forecast to drop from 3.2 % in 2025 to 2.8 % in 2026. (The Guardian)
Sentiment and confidence matter. If buyers and sellers expect slowing growth, job risk or tax increases, they may delay transactions—creating a self-reinforcing slowdown.

5. What does this mean for buyers, sellers and investors?

5.1 For buyers

Opportunities:

For those with strong affordability and timing flexibility, this may be a favourable window. Asking-prices are dropping, and the early-arrival lull means less competition, especially in segments under £500,000.
With mortgage rates possibly falling further if the Bank of England begins cutting later in 2025/early 2026, overall purchasing costs may improve.

Caveats:

Some buyers may still be hesitant given tax uncertainty—should one wait until after the Budget? The risk is that prices move sideways (or even slightly up) if clarity arrives, supply remains constrained, and mortgage rates fall.
Checking transaction costs carefully is important. If SDLT reform or other tax changes come in, the cost calculus may shift (positively or negatively) depending on when the purchase completes.
Consider the length of the transaction cycle. If you assume the rules will change, but your transaction completes after they do, there may still be risk.

5.2 For sellers

Challenges:

Sellers bringing homes to market now face elevated competition from other sellers and cautious buyers. Asking-price reductions are already higher than usual.
If tax changes are announced that disadvantage sellers (e.g., higher CGT, loss of exemptions), there may be incentive to sell sooner rather than later—but that builds supply and puts downward pressure on prices.
For higher-value homes especially, the risk of post-Budget policy changes may reduce the pool of willing buyers or prolong time-to-sale.

Strategies:

Price realistically from the outset. With a high proportion of homes already dropping their asking prices, entering with a competitive price is more likely to result in a smoother sale.
Be mindful of timing. If you anticipate tax changes may land, consider whether completing before or after them is optimal for you (though obviously you cannot guarantee timing).
Work closely with conveyancers and tax advisors to understand potential exposure (CGT, SDLT, etc) in the event of policy change.

5.3 For investors and landlords

The incoming Budget may bring significant structural tax changes—with potential higher CGT, revised SDLT, changes to landlord reliefs, and perhaps more council tax or regulatory burdens. Investors should plan now. (property investors network)
For many small landlords, the combination of higher costs (finance, compliance, tax) and uncertain exit strategy may prompt further portfolio consolidation or exits. This may increase rental stock supply in some areas, or push up rents if supply is constrained and demand remains.
Opportunistic investors may find more motivated sellers, especially in higher-value properties, but likewise face greater structural risk—so due diligence is even more important.

6. What might happen next – scenarios for 2026 and beyond

6.1 Scenario A: Budget delivers clarity + supportive policy

If the Chancellor announces a reasonably predictable and manageable package (limited tax increases, perhaps a tidy reform rather than heavy new burdens), the market may rebound in early 2026. Buyers may return, sentiment may improve, mortgage rates may fall further, and the “holding pattern” may shift into a more normal flow. In that case:

Asking-price falls may moderate, and some modest growth may resume in key segments.
Supply may stabilise (as fewer sellers are hurrying).
Premium segments may pick up if tax uncertainty is removed.
The challenge will be that expectations and sentiment will need to shift, and lingering affordability issues remain.

6.2 Scenario B: Budget introduces heavy tax changes + no stimulus

If the Budget lands with substantial tax increases (CGT hikes, mansion tax, heavy increases in council tax, replacement of SDLT but with new burdens) and the economy remains soft, the housing market could stay weak or deteriorate further. Potential outcomes:

Premium market may suffer further price drops or stagnation as buyers remain sidelined.
Below-£500k segments might hold up better, but even they could see slower growth or declines in some regions.
Some sellers may pull listings or delay, reducing supply in some areas but prolonging sales cycles.
Investors may accelerate exits, increasing rental supply, perhaps pushing down yields or increasing tenancy competition.

6.3 Structural rebound – supply constraints bite

Irrespective of tax policy, if supply remains constrained and demographic/rental demand pressures continue, there may be a structural rebound later in the cycle (2027-28) once the policy dust settles. The OBR’s view is that housing-market reforms take years to feed through. (Office for Budget Responsibility) Agencies such as Savills have already cut their 2026 growth forecasts, citing lighter sentiment and tax worries. (introducertoday.co.uk)

7. Regional snapshots and future hotspots

While national averages are useful, anyone active in the market needs to consider regional variation.

7.1 London & South East

High proportion of premium homes means tax-policy risk is acute.
International buyer flows, currency effects and global wealth factors all play a role.
Supply tends to be tighter, but also competition among buyers is strong.
If the Budget hits high-value homes hard, we may see greater price corrections or slower turnover in this region.

7.2 Midlands, North & other growth corridors

Some of these markets may offer better value and relative insulation from top-end tax pressures.
Affordability is better (on average) and first-time/move-up buyers may drive most activity, less reliant on tax-sensitive premium buyers.
If mortgage rates fall, these regions could benefit sooner from a rebound.

7.3 Rental market implications

If landlords exit (especially in higher-value/rental-yield constrained sectors) and new build supply remains limited, rental demand may absorb more stock and push up rents in some areas.
Regions with limited rental supply (student cities, commuter towns, growth corridors) may become rental hotspots.
Conversely, regions with weaker employment or slower economic growth may see rental demand soften, particularly if student or commuter markets are vulnerable.

8. Key take-aways and actionable insights

For prospective buyers

Now may represent a window of opportunity, especially in sub-£500k segments, but only if you are comfortable with the transaction timing and potential tax-policy changes.
Secure your mortgage and test affordability now; if rates fall or the Budget brings clarity, you’ll be well-positioned.
Don’t assume prices will fall indefinitely—if sentiment rebounds, prices could stabilise or even rise.
Make sure you understand the full cost of buying (taxes, transaction, moving) and the margin for error if something changes.

For sellers

Be realistic with pricing — early asking-price reductions are already common.
Consider timing: is it better to list now (ahead of possible tax change) or wait until after the Budget? There is no one-size-fits-all.
Prepare for longer sales cycles. Having a realistic plan for contingencies (e.g., temporary housing, bridging finance) is wise.
Work with your agent/tax advisor to assess how the potential Budget may affect your specific property (value, tax exposure, buyer pool).

For investors/landlords

Now is the time to stress-test your portfolios. How would higher CGT, increased tax or regulation affect your returns?
Consider whether holding, selling, or adjusting your strategy is most appropriate given your risk tolerance and time horizon.
Watch for structural opportunities: motivated sellers, lower competition, potential for value adds.
But also be cautious: tax changes may skew returns, and the higher-value end may be more challenged than standard residential sectors.

For policymakers and market watchers

The evidence suggests that tax uncertainty (or potential tax change) has a meaningful impact on market behaviour, particularly on higher-value homes.
Structural issues—especially supply constraints and affordability—remain the overarching challenge. Even a tax-neutral Budget may not deliver a rebound if supply remains tight and incomes remain under pressure.
Regional variation matters a lot. One size fits all policy risks being blunt; nuanced regional responses may deliver better outcomes.
Timing matters: if the market expects tax change, much activity may be delayed until clarity arrives—this can create temporary distortions (such as weaker November/December).

9. Conclusion

The UK housing market is navigating a delicate moment. The combination of seasonal slowdown, elevated supply, affordability pressure and significant tax-policy uncertainty is creating a near-term lull. The latest national figures—especially the 1.8 % drop in average new seller asking prices in November and the high proportion of homes with price reductions—underscore that we are not dealing with a typical November dip. Instead, we appear to be in a “holding pattern” as the market awaits clarity from the government.

For many buyers, sellers and investors, this period offers both caution and opportunity. Sub-£500k homes appear less impacted, making them relatively safer territory. Premium segments face greater risk. The impending Budget—scheduled for 26 November—is a major catalyst. If it delivers clarity and moderate change, the market may rebound in early 2026; if it introduces heavier burdens, the softness may persist or deepen.

However, beyond the next few months lies a longer-term structural story: housing supply remains constrained, demographic and rental demand pressures persist, and affordability remains tight. These forces suggest that once the fog of tax uncertainty lifts, we may see a shift back to more normalised market dynamics—though not necessarily full-throttle growth.

In short: the market is in a pause rather than a collapse. But for those planning to buy, sell or invest, the choices they make now—timing, pricing, structure, tax planning—will likely matter significantly. As ever in property, timing, strategy and clarity can make a difference.

If you like, I can provide a breakdown by region (England, Scotland, Wales), or by type of property (detached, semi, flat) to see where the more resilient or vulnerable pockets are. Would you like me to do that?

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