Rightmove’s latest House Price Index shows an annual fall of 0.1% in average new seller asking prices across the UK, which the company attributes to continued underperformance in London and the South East. Monthly, prices rose by an average 0.4%.
While Rightmove says its real-time data shows no immediate reaction from movers to property tax rumours, the company says ‘jitters’ around the autumn budget risk damaging the London market further, where 59% of agreed property sales this year have been over the suggested £500,000 limit. Outside the capital, just 22% of properties are over the threshold.
More than one in ten homes (11%) in London are priced at £1.5 million pounds or more and would also be subject to the rumoured mansion tax, as opposed to an average of just 2% in the rest of the UK.
‘Rumours of property tax changes began swirling in mid-August, and with the Budget itself not arriving until the end of November, this kind of extended uncertainty can affect market activity, especially in the higher price brackets’, Rightmove’s property expert Colleen Babcock said.
“Movers want to be confident in planning their moving costs. Our real-time data has not yet picked up any major shifts, however it’s understandable that those who could be negatively affected by the rumoured changes might be in the process of reassessing their short- and medium-term plans. Our analysis highlights how London and south England-centric the changes would be, and these are the areas that are already performing less strongly.”
Tax rumours aside, Rightmove’s report suggests the first annual price drop since January 2024 is the culmination of several months of competitive pricing by new sellers over the summer.
‘It is this attractive pricing which has continued to drive stronger buying activity in the high-supply market, with the number of sales being agreed now 4% higher than at this time last year’, the company said. ‘This highlights that despite some regional challenges, buyers are still active in these areas for the right property at the right price’.
Regionally, the West Midlands is the only northern region to record a yearly drop in new seller asking prices, down 0.1%. In the South West, prices are down by 1.3% compared with last year, while in the North West they’re up by 3.2%.
Looking ahead, Rightmove’s mortgage expert Matt Smith said a seasonal lending boost may provide some good news for borrowers.
He commented:
“Like in the housing market, we often see a bounce in lender activity in September after the summer holidays so we can expect lenders to remain as competitive as possible to secure business. The rhetoric around mortgages continues to be about how lenders can unlock greater affordability by allowing people to responsibly borrow more, which is encouraging for the market, particularly first-time buyers.”
