Big drop in UK house prices after budget mayhem
Average house prices in the UK have seen a drop of 1.8% in the past month, thanks in part to nervousness over changes introduced in Rachel Reeves’ Autumn Budget.
This is according to the latest December Price Index from Rightmove, which noted that house prices have experienced a second consecutive monthly fall of 1.8% in December, larger than the average seasonal drop of 1.4% during this month.
While December usually brings a slowdown in activity and prices for the Christmas period, these consecutive drops have led to average new seller asking prices being 0.6%, or around £2,059 lower than they were a year ago. The average asking price for a home in the UK is currently £358,138.
Monthly declines were prevalent across all affordability levels, with those at the top of the ladder seeing the biggest drop of 2.4% in average house prices, while the average price of a home for first-time buyers dropped by 1.4% to £221,950.
Rightmove said this amplification in the usual seasonal slowdown was due to uncertainty over the Autumn Budget and the possible introduction of new property taxes, such as the ‘mansion tax’ surcharge on properties worth more than £2 million.
House prices declined across almost all regions, with the North West being the only region to see upward growth in December at 0.1%. The sharpest monthly decline was in the North East, which saw average prices drop by 5%.
In London, house prices fell by 1.2% month-on-month but remained flat compared to the same point last year.
Rightmove property expert Colleen Babcock pointed to budget uncertainty as a key factor in hindering property price growth in the second half of the year.
“Lower pricing supported buyer affordability and drove activity in the first half of the year, even after the April stamp duty deadline in England.”
“In the second half of 2025, uncertainty caused by rumours of property tax changes in November’s Budget swirled, some from as early as August. This had an impact on pricing and activity, as sellers had to try to entice nervous buyers,” she said.
Hopes for a ‘Boxing Day Bounce’
Rightmove said it anticipates a bigger-than-usual ‘Boxing Day Bounce’, where prices rise back up after the Christmas period. It pointed to early signs of a post-Budget market rebound in areas such as London, with more new sellers coming to the market in the week after the budget compared to the weeks before.
“The market will soon benefit from the traditional boost in home-moving activity from Boxing Day. Rightmove’s Boxing Day Bounce is an annual event where we see many begin or resume their plans to move after the distraction of Christmas.” Babcock 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.”
Rightmove said next year ought to be more encouraging in terms of property price growth than the latter half of 2025, with buyer affordability set to improve and a good choice of homes being available to buyers.
It anticipates that based on these factors, the UK will see a rise of 2% in the average price of a house next year.
