House prices dipped at the end of 2025 following a subdued second half of the year but activity is expected to rebound over the Christmas period with average asking prices forecast to rise by 2% in 2026, according to Rightmove.
The average price of property coming to the market fell by 1.8% in December to £358,138, a larger drop than the ten-year December average of 1.4%. While prices typically soften at this time of year, Rightmove said uncertainty linked to Budget speculation amplified the seasonal slowdown in both pricing and activity.
As a result, 2025 ended with average asking prices 0.6% lower than a year earlier. Regional performance varied, with prices rising by 2.6% in the North West, remaining flat in London, and falling by 2.7% in the South West.
Rightmove is now anticipating a bigger-than-usual Boxing Day surge in activity, as buyers and sellers who paused their plans return to the market.
DELAYED DECISIONS
A survey of more than 10,000 potential movers found that almost one in five delayed their home-moving decisions while waiting for the outcome of the Autumn Budget.
Early signs of renewed momentum are already emerging in some areas. In London, the number of new sellers listing higher-value homes rose by 24% in the week following the Budget compared with the week before, after months of uncertainty around potential property tax changes.
Looking ahead, Rightmove expects 2026 to resemble the stronger first half of 2025 rather than the more cautious second half. Buyer affordability is set to improve, while the number of homes available for sale remains at a decade-high level, helping to support transaction volumes and modest price growth.
TAX CHANGE UNCERTAINTY
Colleen Babcock, property expert at Rightmove, says: “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.
“In the second half of 2025, uncertainty caused by rumours of property tax changes in November’s Budget swirled, some from as early as August. This had an impact on pricing and activity, as sellers tried to entice nervous buyers.
“The market will soon benefit from the traditional boost in home-moving activity from Boxing Day. Rightmove’s Boxing Day Bounce is an annual event where we see many begin or resume their plans to move after the distraction of Christmas.
“With the turkey and trimmings barely off the table, each year we see people heading straight to Rightmove to browse the fresh listings for sale and imagine how different next Christmas could look.”
CLEAR DIVIDE
Rightmove’s data highlights a clear divide between the two halves of the year. The number of new sellers coming to market in the first half of 2025 was 9% higher than in the same period of 2024, while the second half saw new listings fall 4% below last year’s levels. Buyer demand followed a similar pattern, running 3% ahead of 2024 in the first half before slipping to 6% behind in the latter months.
Despite the quieter end to the year, overall sales agreed across 2025 were still 3% higher than in 2024, although comparisons were skewed by a strong end to 2024 as buyers rushed to complete ahead of April’s stamp duty changes.
Rightmove expects average new seller asking prices to rise by 2% in 2026, supported by improving affordability and a more stable lending environment. The average two-year fixed mortgage rate now stands at 4.33%, down from 5.08% at the same point last year, while wage growth continuing to outpace inflation should further ease pressure on buyers.
ECONOMIC CERTAINTY
Babcock adds: “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 kick start the year. However, with buyer choice remaining high, sellers will still need to come to the market at tempting prices to attract attention and do all that they can to ensure that their property is presented as well as possible.
“A more stable 2026 would be good for buyer confidence, which in turn would further boost activity levels, leading to a modest price increase.”
CONFIDENCE BOOST
Matt Smith, Rightmove’s mortgage expert says: “We’re expecting to end the year with a Bank Rate cut, which would be good for confidence heading into the Rightmove Boxing Day Bounce.
“It’s unlikely that it will cause much movement in mortgage rates – the markets are very much expecting December’s cut to go ahead, and lenders have shown their hand early, cutting rates and competing to secure end-of-year business. The headline is that home-movers will be entering 2026 looking at cheaper average mortgage rates than they were at the beginning of 2025, helping affordability.
“Those who are seeing slightly lower house prices in their area compared to last year and may have also had an end-of-year pay rise, will see their affordability improved further. Many home-movers will also see that the amount that they can borrow has increased, as lender have been rolling out the Loan-To-Income and stress rate changes that were permitted by the regulator earlier this year.”
BUDGET DIDN’T HAMPER DEMAND
Claire Reynolds, UK Head of Sales at Strutt & Parker, says: “The weeks of speculation leading up to the Autumn Budget certainly cooled the property market, especially for those making discretionary moves.
“However, the mood shifted almost instantly once the day finally arrived, with some evidence of a ‘Budget bounce’ in the past couple of weeks.
“Some sellers who had been waiting on the sidelines have decided to launch before Christmas – hoping to catch those scrolling through Rightmove between Christmas and New Year – while others are preparing to come to market in early January.
“Clarity has helped people become more decisive, and the Budget hasn’t deterred demand from either buyers or sellers. These signs point to a stronger market heading into 2026.”
SURGE IN EXCHANGES
Phillip Sandbach, Managing Director at John German Estate Agents in the Midlands, says: “The year was progressing quite nicely, then along came the Budget speculation which really put the brakes on, particularly on the listings side.
“While sales were still being agreed across most of the market, the £1m + market which was the subject of a lot of speculation did dry up.
“Following the Budget, which in the end didn’t significantly impact the majority of the property market, we have seen a marked uptick in activity and a surge in exchanges too. With an anticipated drop in interest rates, we are expecting a very busy start to 2026.”
BUYERS WON’T CHASE FANTASY PRICES
Jordan Halstead, Chief Executive at Jordan & Halstead Estate Agents in Chester, says: “2025 has felt like two different markets. The first half was busy and focused, but the last quarter slowed down as buyers and sellers paused to see what might come out of the Budget. Deals haven’t dried up, but people have taken longer to commit.
“Properly priced homes are still selling, the ones that have struggled have been the over-optimistic instructions.
“Buyers will pay fair value; they just won’t chase fantasy prices. Looking ahead, I think 2026 will be steady with small rises. Once the political uncertainty of the Budget has cleared and people feel confident that rates are stable, the market will start moving more freely again.”
TWO TIER MARKET
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Our experience of the post-Budget period doesn’t chime with Rightmove’s but perhaps that’s because the UK’s largest property portal measures asking or aspirational prices rather than values.
“On the ground, we’ve noticed many buyers and sellers have been sitting on their hands, fearing the worst from the Chancellor, before deciding whether to act.
“The damp squib of a Budget has heartened those in the more price-sensitive £500,000 to £1 million bracket who are breathing a sigh of relief.
“Those in and around the ‘mansion tax’ levels are generally proving more cautious and not contemplating moves unless circumstances dictate – or at least further details of charging emerge. As a result, we expect a two-tier market to develop in the early New Year with demand gradually increasing for smaller homes particularly if base rate is reduced sooner rather than later.
“We generally find Boxing Day generates a lot of enquiries of which a significant proportion are of relatively poor quality.
“We prefer to judge how the next quarter at least is likely to work out when we’ve had a chance to assess the motivation of the fresh crop of buyers – as well as the sellers. Values will be determined by affordability and the amount of appropriately priced stock in the most sought-after ranges.”
