Speculation surrounding the upcoming Budget appears to be affecting property asking prices, with Rightmove reporting a bigger-than-usual seasonal slowdown this month.
New seller asking prices dropped by 1.8% in November, taking the average price of properties coming to market to £364,833. Price reductions on homes already listed are at their highest level since February 2024, the property website said. Buyers also have the widest choice of homes for sale in a decade, meaning sellers must price competitively to stand out.
Colleen Babcock, property expert at Rightmove, said: “It appears that the usual lull we’d see around Christmas time has arrived early this year, and sellers who are keen to move are having to work especially hard to entice buyers with competitive pricing.
“This means that average new seller asking prices are now 0.5%, or £1,759 cheaper than a year ago. In addition, a third of homes already on the market for sale have had their asking price reduced, with an average reduction of 7%, further illustrating that this is a buyers’ market.”
Higher value homes hardest hit
Budget uncertainty appears to be particularly affecting higher value properties, amid fears of potential changes such as a mansion tax or higher Stamp Duty. Sales agreed on homes priced £2m or more are down 13% year-on-year, whilst those between £500,000 and £2 million have fallen by 8% according to Rightmove.
Ms Babcock said: “The decade-high number of homes available on the market continues to restrict price growth, with many new sellers keen to avoid standing out by over-pricing compared with their competition. The Budget is a big distraction, and is later in the year than usual, with many would-be buyers waiting to see how their finances will be impacted.”
The good news is that affordability is improving for buyers not only due to easing property prices, but also thanks to lower mortgage rates, with many lenders also boosting the amount it’s possible to borrow.
With inflation easing in the year to October, markets currently expect a base rate reduction in December, although this isn’t guaranteed.
Matt Smith, Rightmove’s mortgage expert said: “We’re starting to see some notable weekly drops in rates, with some mortgage lenders offering headline-grabbing cheap rates as they compete for end-of-year business. Home-movers can expect some small drops in average mortgage rates to continue over the next few weeks. The Budget has created a lot of uncertainty and has had a big build-up, so once the announcements are out the way, home-movers can focus on planning with more confidence.”
