Property Market: Post Budget Update

As the end of the year approaches, it is customary to reflect on the year as a whole whilst casting an eye to the forthcoming year. 

On balance, 2025 performed as we had anticipated.  The beginning of the year started well.  This was fuelled by pent-up demand from a muted 2024 and continued stability in the mortgage market.

The Stamp Duty changes, which kicked in during the 2nd quarter of this year, made the Spring/Summer months feel a little quieter in comparison.  The latter part of the year has felt more challenging.  Whilst there is still lots of positivity, the continued affordability issues, particularly prevalent in the South East, created a very price-sensitive market. 

Widespread speculation surrounding property tax reforms featuring in the Budget caused an unseasonal slowdown in September and October. The property market is fuelled by sentiment, so this uncertainty really does affect people making firm decisions. 

So, to the Budget. 

Speculation, ahead of the Budget, resulted in an unseasonal reduction in average asking prices, according to Rightmove. The latest Rightmove House Price Index shows average new seller asking prices fell by 1.8% in November, to £364,833.  This compares to an average drop over the previous ten years of 1.1% in November and is the largest fall in prices at this time of year since 2012.

What Budget announcements will impact the property market?

Given the speculation and the hiatus this caused, today’s property related announcements felt a little like walking between the raindrops.  The key topics, summarised by Zoopla in their Budget Breakdown, are:

• Budget boost for the market over £500,000: our data shows 210,000 homes for sale over £500,000 will avoid a new annual property tax, which is great news for their owners and likely to reboot activity after months of ‘wait and see’.
• New ‘mansion tax’ in the form of a Council Tax High Value Supplement for homes over £2m. We estimate this to cover 0.5% of UK homes, with 85% in London and the South East.
• No change on stamp duty means many buyers in lower value housing markets will continue to only pay modest amounts of stamp duty. However, the price bands for stamp duty were set a decade ago and average home buyers are paying more over time.
• Tax rates for property income will increase by 2%, piling further pressure on landlords and the rental sector.

Whilst affordability will continue to be a factor going into 2026, with lower mortgage rates and increased stock availability, our view is that now is a great time to buy.  For sellers, if you are motivated to sell, you need to respond to feedback from the market and act accordingly. 

With the Budget out of the way, we are confident that those who were waiting for today's announcement will be keen to get their property journey underway.  For honest, pragmatic advice, we would be delighted to help. 

May we take this opportunity to wish you a very merry Christmas.

Source: 
Rightmove November House Price Index 
Zoopla Budget Breakdown
Photo by micheile henderson on Unsplash