Hesitant market as Budget speculation fuels uncertainty, especially at upper end.
Average new seller asking prices fall by 1.8% (-£6,589) this month to £364,833. This is a larger-than-usual November drop, as the decade-high number of homes for sale and Budget hiatus add to the seasonal slowdown in new seller pricing.
In addition, asking price reductions of homes already on the market are at their highest level since February 2024, as sellers try to tempt bargain-hunting buyers.
Speculation about the contents of the Budget is fuelling uncertainty across much of the market, especially at the upper end where there are ongoing rumours of potentially costly property tax increases:
Sales agreed for £2 million+ homes, which are the subject of a potential mansion tax, are down 13% year-on-year.
Homes priced between £500,000 and £2 million, which would be impacted by potential stamp duty changes in England, or perhaps the rumoured capital gains tax, have seen sales agreed drop by 8% year-on-year.
The under £500,000 market has been less impacted, with sales agreed down by only 4% on this time last year. This mass-market sector is likely being unsettled by general Budget jitters rather than specific policy rumours.
Despite these downward trends across the month of October - which compares to a strong month at this time last year - the year to date still shows the number of sales being agreed at 4% above the same period in 2024.
The average two-year fixed mortgage rate is 4.41%, compared to 5.06% at this time last year. Falling interest rates and rising wages have boosted affordability, but the market still needs further Bank Rate cuts and less uncertainty about taxes.
Price & activity trend
Regional trends
Affordability trends
November Housing Market: Price Drops and Buyer Hesitation Amid Budget Uncertainty
This November, average asking prices for new sellers have dropped by 1.8%, or £6,589, bringing the average price to £364,833. This marks a larger-than-usual price fall for this time of year, as the typical November drop is only around 1.1%. It’s the biggest decline at this time of year since 2012, driven by a combination of factors, including a high number of homes available for sale and increasing concerns over how the upcoming Budget might affect housing affordability and personal finances. As a result, we’re seeing an earlier-than-usual slowdown in the market, with the usual Christmas lull arriving ahead of schedule.
Sellers are feeling the pinch, with over a third (34%) of homes on the market having had their asking prices reduced. The average size of these price cuts is 7%, the highest since February 2024. These reductions suggest sellers are adjusting to a more cautious market and hoping to attract bargain-hunting buyers who are less active than usual due to the uncertainty.
Impact of the Budget on Higher-Price Markets
Much of the uncertainty is tied to speculation about the upcoming Budget, particularly regarding potential new property taxes. The high-end market, in particular, is seeing hesitation from both buyers and sellers. For homes priced over £2 million, which could be affected by the rumoured mansion tax, sales have dropped by 13% compared to last year. There’s also been a 9% decline in new sellers coming to market at this price level, which is more significant than the drop in the lower-priced segments.
Similarly, homes priced between £500,000 and £2 million are feeling the impact of concerns over potential changes to stamp duty or capital gains tax. Sales in this price range are down by 8% year-on-year, slightly more than the overall market decline of 5%. Although the high-end market is particularly sensitive to Budget rumours, it’s clear that the general sense of uncertainty is having an effect across various sectors of the market.
The Resilience of the Under-£500,000 Market
Homes priced under £500,000, which make up about 75% of the market, are showing more resilience. Sales in this price bracket are only down by 4% compared to last year, suggesting that buyers in this range are continuing with their plans despite the broader market jitters. These homes haven’t been directly impacted by the property tax rumours, but the general uncertainty around the Budget and personal finances may still be causing some caution among potential buyers.
Comparing to Last Year and Looking Ahead
It’s important to note that October’s figures are being compared with a strong month in 2023, where sales were boosted by anticipation of stamp duty changes coming in April 2025. This comparison is contributing to the year-on-year sales declines we’re seeing across most sectors. However, the overall number of sales agreed year-to-date is still up by 4% compared to the same period in 2024, which is a positive sign for the market as a whole.
Mortgage Rates and Affordability
In addition to the Budget, many homebuyers are keeping an eye on mortgage rates. The average two-year fixed mortgage rate is currently 4.41%, down from 5.06% this time last year. While the drop in rates has been slower than expected in 2025, there’s still hope that the Bank of England may cut rates in December, which would help improve affordability for potential movers. The decision to hold the Bank Rate steady in November may have been a disappointment to some, but a rate cut before Christmas could provide much-needed relief to the market.
Final Thoughts
In summary, the market is facing a period of uncertainty, with a combination of high housing stock, speculation around tax changes, and cautious buyers leading to a slowdown. While the market has shown resilience, particularly in the lower price ranges, much depends on the outcome of the upcoming Budget and any changes to interest rates. As we move into the final months of the year, sellers will need to stay flexible, and buyers may want to keep an eye on potential rate cuts and tax developments as they navigate these uncertain times.