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Asking prices for UK homes are £2,000 lower than at the end of last year following uncertainty around property tax rises in the lead-up to the Budget.
The average price of a property coming to market in the four weeks to December 6 was £358,138, which is 0.6 per cent — or £2,059 — lower than the same period a year ago, Rightmove said on Monday. In contrast, last year ended with the average asking price £5,000 higher than at the end of 2023.
It comes after a larger than usual fall in asking prices between November and December of 1.8 per cent. While there is usually a dip in December, this year’s price fall was higher than the average drop over the past 10 years of 1.4 per cent.
Chancellor Rachel Reeves’ Budget on November 26 introduced a “mansion tax” surcharge on properties worth more than £2mn as well as a 2 percentage point increase in rates of property income tax.
But speculation of upcoming property tax rises was already circulating in August, contributing to more subdued activity throughout the second half of the year, Rightmove data showed.
Claire Reynolds, UK head of sales at property consultancy Strutt & Parker, said: “The weeks of speculation leading up to the autumn Budget certainly cooled the property market, especially for those making discretionary moves.”
The number of new sellers coming to market in the second half of 2025 was 4 per cent below the same period last year, having been 9 per cent ahead year on year in the first half.
Similarly, the number of prospective 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.
Four-bedroom detached houses and properties with at least five bedrooms registered the largest month-on-month fall in prices, Rightmove said, dropping 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 per cent.
The figures are based on about 66,000 asking prices for properties that were put on 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 reduce mortgage rates.
Improved buyer affordability and plenty of choice for buyers also suggest a rebound in activity in 2026, according to Rightmove, which predicts new seller asking prices rising by 2 per cent over the year.
Colleen Babcock, property expert at Rightmove, said: “With market conditions supporting higher levels of activity, and a hopefully more certain economic environment, we forecast a better year for price growth in 2026, with a strong rebound in activity to kick-start the year.”