House prices have recorded their sharpest November fall in more than a decade as wealthy homeowners put moves on ice ahead of a Budget expected to target high-value properties.
New figures from Rightmove show average new seller asking prices dropped 1.8% (£6,589) this month to £364,833, the largest November decline since 2012.
Analysts say a glut of homes on the market, combined with intensifying speculation over tax rises, has pushed the traditional year-end slowdown into sharper territory.
With the Chancellor preparing to deliver what many expect to be a revenue-raising Budget, the top end of the housing market has turned notably cautious.
MANSION TAX
Sales agreed for homes priced above £2 million – those most vulnerable to a potential mansion tax – have fallen 13% year-on-year, while new listings in the same bracket have dropped 9% as sellers wait to see whether higher levies will land.
The malaise extends to the £500,000 to £2 million bracket, which could face changes to stamp duty or capital gains tax. Sales in this band are down 8%, compared with an overall decline of 5% in agreed sales across the market.
Agents report that many wealthier households are delaying decisions until the fiscal picture becomes clearer.
By contrast, the sub-£500,000 market – which makes up around 75% of all transactions – has held up relatively well, with sales down 4% year-on-year. While this segment has not been the focus of tax rumours, it is still being buffeted by wider concern about household finances.
SURGE IN PRICE REDUCTIONS
One clear sign of weakening confidence is the surge in price reductions. Over 34% of homes currently on the market have had their asking price cut, the highest proportion since February 2024, with the average reduction running at 7%.
Rightmove said the sheer number of properties for sale – the highest in a decade – was forcing sellers to sharpen their pricing to attract increasingly selective buyers.
“The Budget is a major distraction.”
Colleen Babcock (main picture, inset), property expert at Rightmove, said: “The Budget is a major distraction. Many would-be buyers are waiting to see how their finances may be affected, and sellers who are keen to move are having to work especially hard with competitive pricing. This is a buyers’ market.”
Mortgage rates have eased but remain a drag on sentiment. The average 2-year fix now stands at 4.41%, down from 5.06% a year ago but falling more slowly than expected. Hopes now rest on a potential Bank Rate cut in December, which could offer some relief to stretched borrowers.
Despite the slowdown in October, the number of sales agreed so far in 2025 remains 4% higher than at this point last year. But estate agents warn that momentum will hinge on whether the Chancellor presses ahead with property tax reforms.
Until then, the top of the market – traditionally a bellwether for broader confidence – looks set to remain in a holding pattern.
BUDGET UNCERTAINTY
Matt Smith, Rightmove’s mortgage expert, said: “The Bank opted to maintain the status quo ahead of the widely anticipated Budget, but there’s still a good chance of another rate cut before the end of the year.
“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.”
WAITING GAME
Tomer Aboody, director of specialist lender MT Finance, added: “With the never-ending negative sentiment surrounding the budget, sellers are reducing their price expectations in order to encourage buyer interest.
“As the budget looms, and with it the potential of multiple parts of the market being impacted, many would-be buyers are playing the waiting game to see what the fallout is and the impact on their own purchases.
“Hopefully, another rate reduction in forthcoming months will help reduce the impact of any increases in stamp duty or inflation.”
CAUTIOUS MARKET
Nick Leeming, Chairman of Jackson-Stops, added: “For prime country houses, it has been a market of two halves in November so far.
“Whilst some have chosen to wait for clarity after the Budget – whatever news that may bring – others have accelerated their transaction timeframes in order to exchange before the 26th and avoid any surprises.
“Wider caution among buyers of higher valued property in the run-up to the Budget reflects the variety of trailed policies from the government, alongside a decade-high level of property listings softening sellers’ pricing power.
“We saw a similar level of caution from the Bank of England’s decision to hold interest rates in November, just as movers wait with calculators in hand to see if a reset in tax could shift the numbers and impact any immediate plans.”
“However, supply and demand still remain fundamentally stable across the national picture, reflected in relatively stable transaction figures and continued listings. Regional disparities are becoming more pronounced. We’re seeing unseasonably high enquiries in places like Exeter, Chester and Cornwall.”
SLIGHT SLOWDOWN
Bertie Russell, Managing Director at Russell Simpson in London, said: “Having experienced many elections, Budgets and other economic or political speed bumps like this in the past, the anticipation and the unknown have always been worse than the result.
“I would predict that this slight slowdown from buyers and sellers in the autumn market of this year will likely lead to a busy few weeks before Christmas and more definitive action taken by both buyers and sellers in the new year.”
SOFTENED SELLER EXPECTATIONS
And Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “These figures, though of course reflecting asking rather than sale prices, reinforce the message given by recent improving mortgage approval numbers, as well as what we’ve seen on the ground.
“Seller expectations have inevitably softened with budget tax increases certainly on the way and so much more choice of property for buyers.
