Average UK house prices drop by £5,366 as post-budget jitters set in
Data shows the average price of a UK property coming to market is down 1.8% this month, or the equivalent of a £5,366 discount, as the cost of a home swoops to £366,592.
This marks the second month of higher than average declines on the trot, with the usual drop seen at this time of year being 0.8%, according to property portal Rightmove.
Last month’s pre-budget jitters have turned into post-budget disappointment, creating new challenges for the housing market, and appear to have caused a larger-than-normal seasonal slowdown in pricing as we head towards Christmas, Rightmove said.
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Despite the budget, activity remains stronger than last year due to optimism around the interest rate cut path, which is feeding through to mortgage rates. Due to this, following analysis of real-time data, Rightmove has forecast a 4% increase in average new seller asking prices next year.
Although prices are predicted to rise, the market is expected to remain price-sensitive, with sellers currently competing with a decade-high number of other sellers to attract a buyer.
While more mortgage rate cuts are still expected during 2025, bank rate cuts are now forecast to be slower-paced, which could delay the affordability improvements that some movers have been holding out for, Rightmove added.
More mortgage rate cuts are still expected during 2025, according to Rightmove. (PA/Alamy) · Maureen McLean
“The signs are that the market momentum that we’ve been seeing this year will continue into next year, especially if mortgage rates drop to a level that gives greater affordability to some movers who have been waiting in the wings until now,” said Tim Bannister, Rightmove’s director of property science.
“However, we still expect some twists and turns next year. 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, and sellers will still need to price temptingly enough to secure a buyer while the choice of homes for sale remains as high as it is right now,” he added.
Rightmove’s forecast tracks with other data released earlier this week, which suggested that the UK’s average house price is set to rise by 3% in 2025, followed by a further uptick of 3.5% in 2026 and 2.7% in 2027. Next year, this would bring the average house price to £300,000, or around a £10,000 increase on current levels.
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Estate agency Hamptons’s near-term forecasts have remained unchanged, but the longer-term view has been similarly downgraded due to high interest rates and the tax landscape.
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Regionally, London is expected to be the winner in 2025, outperforming other regions for the first time in around a decade. Hamptons forecast a 4% annual house price growth in London in 2025.
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