UK Housing Market Sees Sharp November Price Drop
New data reveals that the average asking price for a British home has fallen significantly, dropping by 1.8% in November. This decline, reported by the property portal Rightmove, has reduced the typical price tag to £364,833, a decrease of £6,589 compared to the previous month.
Budget Uncertainty Fuels Market Caution
Experts point to speculation surrounding the upcoming budget announcement by Chancellor Rachel Reeves on 26 November as a key factor behind the slowdown. Potential reforms to property taxes, including stamp duty, have caused many potential buyers to adopt a 'wait-and-see' approach, effectively putting the market on hold.
Colleen Babcock, a property expert at Rightmove, commented on the situation, stating, "The budget is a big distraction... with many would-be buyers waiting to see how their finances will be impacted. It appears that the usual lull we’d see around Christmas time has arrived early this year."
A Deeper Look at the Numbers
While a slight dip in November is normal, with an average monthly price drop of 1.1% over the past decade, the current 1.8% fall is the most substantial for this period since 2012. The data shows that the market's hesitation is widespread.
34% of all properties listed for sale have undergone a price reduction, with the average cut being 7%. Both of these figures are at their highest level since February 2024, indicating a clear shift in seller strategy as they compete for a smaller pool of active buyers.
The impact is not uniform across the market. The survey indicated that homes priced under £500,000 have been less affected by the rumours of policy changes, suggesting that the budget speculation is having a more pronounced effect on the higher end of the property ladder.
Broader Economic Forecast
The cooling housing market aligns with a separate forecast from the EY Item Club, which predicts a weakening in UK mortgage lending growth for 2026. After an expected net growth of 3.2% this year, lending is forecast to slow to 2.8% next year due to stretched affordability and a squeeze on real incomes.
Martina Keane, EY UK and Ireland financial services leader, noted, "The UK economy made a strong start to 2025, but momentum is slowing... However, our industry is resilient and adaptable, and our fundamentals remain solid." The anticipated dip in 2026 is expected to be temporary, with improvements forecast for 2027 and 2028.
