UK property prices declined for the second consecutive month in early December, as tax speculation and slower buyer demand continued to affect the housing market. According to Rightmove, the average asking price for newly listed homes in the four weeks to 6 December fell by 1.8% to £358,138 (€407,972), following a similar 1.8% drop in November. This puts prices 0.6% below levels seen a year ago, representing a real decrease of £2,059 (€2,345).
Colleen Babcock, a property expert at Rightmove, explained that uncertainty surrounding potential property tax changes contributed to subdued pricing and activity in the latter half of 2025. “Lower price growth supported buyer affordability and drove activity in the first half of the year, even after the April stamp duty deadline in England,” she said. “In the second half of 2025, uncertainty caused by rumours of property tax changes in November’s Budget swirled, impacting both pricing and activity as sellers tried to entice nervous buyers.”
The expectation of tax rises, particularly before the approval of the state budget in November, contributed to a slowdown in market activity. New listings were 9% higher than the first half of 2024, but reversed to 4% below the previous year during the second half. Buyer demand followed a similar pattern, rising 3% in the first half but falling 6% in the latter months of 2025. Despite these fluctuations, the overall number of sales agreed in 2025 was 3% higher than in 2024.
The drop in prices could benefit first-time buyers seeking to enter the market in early 2026. Rightmove predicts that new seller asking prices may rise by 2% later in the year. Mortgage rates also remain comparatively lower than last year, with the average two-year fixed rate at 4.33%, down from 5.08% in 2024.
In addition to short-term factors, new taxation measures are set to influence the market over the long term. The November Budget introduced a High Value Council Tax Surcharge, often referred to as a “mansion tax,” for residential properties in England valued at £2 million or more. The charge, which will take effect in April 2028, starts at £2,500 (€2,847) and rises progressively to £7,500 (€8,543) for homes worth £5 million or above.
Despite recent price declines, market experts expect conditions to improve in 2026. Babcock said, “With market conditions supporting higher levels of activity and a hopefully more certain economic environment, we forecast a better year for price growth in 2026, with a strong rebound in activity to kickstart the year.”
The recent trends illustrate a housing market navigating both economic pressures and policy changes, with short-term price drops offering potential opportunities for buyers while longer-term taxation plans may influence property values in the years ahead.
