However, there could be good news ahead – depending on mortgages
House prices in the UK have fallen more sharply than expected as what began as “pre-budget jitters” has turned into “after-budget hangover”. Data from Rightmove, the country’s biggest property platform, shows the average asking price of a newly listed home dropped by 1.4% in November to £366,592. This decline exceeds the typical seasonal fall of 0.8%.
The dip follows a subdued October, when asking prices increased by just 0.3%, far below the long-term average rise of 1.3% for the month. Larger homes, such as five-bedroom properties and four-bedroom detached houses, experienced the steepest declines, with prices in this category falling by 3.3% in November.
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Rightmove attributed the decline to uncertainty surrounding the recent budget, which raised stamp duty for most home-movers while offering no additional incentives for first-time buyers. This fiscal policy shift appears to have contributed to a “larger-than-normal seasonal slowdown in pricing” as the market heads into the typically quieter Christmas period.
“There’s been a lot of news to digest for home-movers over the last few weeks, and it appears that the market may still be chewing it over,” said Tim Bannister, Rightmove’s head of property data. He noted that demand from buyers had already slowed in the weeks leading up to the budget and continued to do so in its immediate aftermath.
However, Bannister highlighted “early signs of a post-interest rate-cut uptick in buyer demand” following the Bank of England’s decision to lower interest rates earlier this month. This trend is part of the reason Rightmove predicts a much stronger housing market in 2025, forecasting a 4% increase in asking prices. This would be the highest projected growth since 2021, a year that saw significant market activity due to stamp duty holidays and a surge in post-lockdown demand.
Despite November’s decline, asking prices on Rightmove have risen by 1.2% over the year so far, aligning with Bannister’s earlier prediction of 1% growth by year-end, given the typical December slowdown. Lower interest rates and the anticipation of further cuts in the coming year have brought more prospective buyers into the market. Rightmove estimates that 23% more people are currently looking to move home compared to the same period last year, with the number of agreed sales rising by 26%.
- Typical asking price for a home is now £366,592 – down £5,366 month on month
- Data shows a drop in number of buyers contacting agents
- Higher-end properties saw the biggest drop at 3.3%
The number of sellers entering the market has also increased, with listings up 6% year-on-year, marking the highest level in a decade. While this influx of supply may challenge the pace of price growth in 2025, Bannister believes that falling mortgage rates should help ease affordability pressures.
“The speed at which mortgage rates come down next year will be key in determining activity levels for some of the market’s traditionally busiest periods,” Bannister said. He added that sellers would need to “price temptingly enough” to attract buyers, especially with the current abundance of homes available for sale.
