UK Housing Market Cools Sharply Ahead of Budget as Asking Prices Fall at Fastest Rate in 13 Years
LONDON Britain’s housing market is showing its clearest signs yet of a slowdown, as fresh data reveals sellers are cutting prices at the fastest rate for this point in the year since 2012. With two weeks until the Chancellor delivers the Autumn Budget, anxiety around potential tax changes, high borrowing costs and deep affordability pressures are combining to stall activity and in some areas, drag prices down more sharply than expected.
According to property portal Rightmove, the average asking price for newly listed homes in the four weeks to 8 November fell 1.8 percent, dropping to £364,833. That fall, the equivalent to £6,589, is well above the seasonal norm. Analysts say November typically brings a small adjustment as sellers price realistically ahead of the Christmas lull, but this year’s fall sits far outside standard seasonal movement.
Rightmove reports that 34 percent of sellers reduced their asking prices, the highest share in over a decade. The average reduction was seven percent, reflecting what the portal described as “a more cautious and price-sensitive market” shaped by stretched household finances and uncertainty about government policy. Homes under the £500,000 mark, a key segment for first-time buyers, showed slightly more resilience, but still registered a fall in new-listing prices compared with October.
Budget jitters add to slowdown
One of the biggest drivers of the current cooldown is speculation about the Chancellor’s upcoming Budget on 26 November. Reports that Rachel Reeves is considering adjustments to property taxation including possible changes to stamp duty thresholds or reliefs have led many would-be buyers to pause until the fiscal outlook becomes clearer. Economists note this hesitation appears particularly strong among first-time buyers and landlords sensitive to tax rules.
“When there is policy uncertainty, buyers tend to sit on their hands,” said one London-based mortgage broker reacting to today’s figures. “People want to know if property taxes are about to rise, fall or be reshaped especially after a year of squeezed incomes and persistent inflation.”
The Rightmove dataset reinforces what lenders and estate agents have reported for months: interest rates remain a drag on buyer activity. Although inflation has eased, the Bank of England has held interest rates steady, meaning mortgage costs remain elevated. Many households reaching the end of fixed-rate deals are facing repayments hundreds of pounds higher than before reducing their ability to move or upgrade their home.
Affordability still at crisis levels
For buyers, the cooling market offers only partial relief. While prices have begun to soften, the ratio of average house prices to average earnings remains historically high. At the same time, earnings growth has slowed sharply since summer, and wage stagnation is once again tightening the squeeze on household budgets.
Even with price reductions, the average monthly mortgage payment has risen significantly over the past two years. This leaves many first-time buyers unable to secure lending large enough to meet even the discounted prices currently appearing on the market. Analysts warn this could lead to a “stuttering” market over winter, with homes spending longer on listings before eventually selling at lower prices.
EY Item Club forecasts published today reinforce this outlook. They expect mortgage lending growth to slow from 3.2 percent in 2025 to 2.8 percent in 2026, citing reduced affordability, high borrowing costs and weaker economic momentum. This cooling in lending is likely to put continued downward pressure on prices well into the first quarter of 2026.
Regional splits widen
While the national average fell, the slowdown is not uniform. London and the South East saw the largest declines in asking prices, driven by high absolute values and greater sensitivity to interest rates. Northern regions, where average prices remain lower, saw smaller reductions though more sellers are trimming prices than earlier in the year.
Rightmove also highlighted a notable increase in supply. More sellers have listed homes this autumn compared with 2023, giving buyers more choice and reducing the competitive bidding pressure that kept prices high. In some areas, this shift in balance has led to “buyer’s market” conditions emerging for the first time since the pandemic rebound.
What happens next?
The next major driver for the housing market will be the Chancellor’s Budget on 26 November. Any changes to stamp duty, capital gains tax, mortgage relief or other housing-related measures could have a significant impact on both short-term activity and long-term market direction.
If taxes rise, as some analysts predict, it could further cool prices over winter. Conversely, if the Treasury offers relief for first-time buyers or targeted support for the mortgage market, transaction volumes could stabilise heading into spring.
Either way, today’s data shows the market is already reacting to tighter household budgets, high borrowing costs and national policy uncertainty. With wages stagnating, consumer confidence fragile and borrowing costs unlikely to fall dramatically in the short term, the housing market may be entering a slower, more price-sensitive phase than the rapid inflation seen during the 2020–2022 boom.
This article is provided by Fidelis News. Free to read, not free to make. Support independent journalism via Buy Me a Coffee.
Sources: Rightmove, Reuters, The Guardian.
Date: 17 November 2025 | By: Fidelis News Staff
