Asking prices for UK homes have decreased by £2,000 compared to the end of last year, attributed to uncertainty surrounding potential property tax increases ahead of the recent Budget announcement. According to Rightmove, the average asking price for a property listed in the past four weeks was £358,138, reflecting a decline of 0.6%—or £2,059—compared to the same period in 2022. This sale period ended with asking prices £5,000 higher in December 2022.
The usual seasonal drop in home prices from November to December was more pronounced this year, with a decrease of 1.8%, surpassing the 10-year average of 1.4%. The recent Budget, presented by Chancellor Rachel Reeves on November 26, introduced a “mansion tax” surcharge for properties valued over £2 million and increased property income tax rates by two percentage points. Prior speculation regarding tax hikes had already contributed to a slowdown in market activity during the latter half of the year.
Claire Reynolds of Strutt & Parker stated that the apprehension leading up to the Budget particularly affected discretionary homebuyers, resulting in new sellers entering the market at a rate 4% lower than the previous year. Prospective buyer inquiries also declined by 6% compared to 2022.
Despite these trends, there is optimism for the housing market in 2026, as financial markets indicate a possible interest rate cut by the Bank of England, which could lead to reduced mortgage rates. Rightmove forecasts a 2% rise in new seller asking prices for the coming year as market conditions improve.
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