UK Housing News
Average UK House Asking Price Falls 1.4% Amid Market Uncertainty and Seasonal Slowdown
House price drop set to be short-lived as Rightmove anticipates 4% increase in 2025
David Hannah, Group Chairman of Cornerstone Tax, points out how the government’s lack of strategic thinking has hindered the UK housing market
The average asking price for a UK home fell by £5,366 (1.4%) in November to £366,592, a sharper decline than the usual 0.8% drop seen during this time of year, according to Rightmove. This unusually large decrease reflects market uncertainty driven by the Autumn Budget and the typical pre-Christmas slowdown. In light of this, David Hannah, Group Chairman of Cornerstone Tax, highlights that the Autumn Budget was a missed opportunity to stimulate the UK's housing market. Measures such as the 2% increase in the second home surcharge and future stamp duty reforms on first time buyers by the government, will further hinder affordability for Brits, even as house prices temporarily decline.
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“Furthermore, it would make sense for the new Government to suspend, or even abolish, the 3% surcharge where properties are being acquired for private rental sector investment."
David Hannah, Group Chairman
While lower house prices might appear promising for first-time buyers, the market remains highly competitive and sensitive to economic changes. Rightmove forecasts a 4% increase in asking prices in 2025, fuelled by pent-up demand and the anticipated easing of mortgage rates. While these factors are expected to drive prices upward despite ongoing affordability challenges, mortgage rates, though anticipated to decrease further, are likely to fall more gradually than previously forecast. As a result, buyers will continue to face elevated borrowing costs for the foreseeable future.
David Hannah also notes that the Chancellor’s efforts to discourage second-home ownership could create opportunities for new buyers. However, he warns that additional changes, such as the Labour government’s planned rollback of the temporary nil-rate stamp duty band in April 2025, are likely to cause a surge in transactions ahead of the new rates. This will likely be followed by a market slowdown. This cycle of short-term market activity and subsequent cooling highlights the continued volatility and challenges within the UK housing sector.
David Hannah, Group Chairman of Cornerstone Tax, comments:
“The decision from the government to lower stamp duty bands shows a concerning deficit of joined-up thinking. Does this Chancellor and Prime Minister not understand that if they want 1.5 million new homes, they cannot drive landlords out of the market, incur additional charges for first-time buyers and freeze up working capital for developers – which can only be available if these homes are selling. I expect stamp duty receipts to fall significantly, then to flatline in Q1 2025, potentially plunging the British property market into a desperate situation. In essence, reducing stamp duty thresholds means that it will ultimately be the consumers who foot the bill.
“Furthermore, it would make sense for the new Government to suspend, or even abolish, the 3% surcharge where properties are being acquired for private rental sector investment. Removing this measure would encourage landlords to increase their holdings, rather than exit the market – reversing the decline in supply of rental homes and potentially expand it to the point where demand no longer outstrips supply.”
David Hannah, Group Chairman
