Rightmove is forecasting a stronger-than-usual “Boxing Day bounce” in the housing market, after budget uncertainty brought forward the traditional Christmas slowdown and weighed on prices and activity in the final months of the year.
The property portal said speculation around potential property tax changes ahead of November’s budget created “gloom and uncertainty”, amplifying the seasonal lull that typically occurs in December.
Average asking prices of newly listed homes fell by 1.8 per cent this month to £358,138, compared with the usual December decline of 1.4 per cent. As a result, average asking prices are now down 0.6 per cent across 2025 as a whole — only the second annual fall in the past decade, following a decline in 2023.
“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,” said Colleen Babcock, head of partner marketing at Rightmove. “This had an impact on pricing and activity, as sellers tried to entice nervous buyers.”
Higher-value properties were hit hardest by the uncertainty. Rightmove said “top-of-the-ladder” homes — typically priced at £600,000 or more — saw the greatest slowdown in activity, reflecting early speculation that chancellor Rachel Reeves was considering a new tax on homes sold for more than £500,000. That proposal was ultimately dropped in favour of a “mansion tax” on properties valued above £2 million.
Despite the overall annual fall, house price trends varied widely across the country. Prices in the north-west of England rose by 2.6 per cent year-on-year, making it one of the strongest-performing regions. London prices were broadly flat compared with 12 months ago, while the south-west saw a 2.7 per cent annual decline.
Rightmove said 2025 effectively split into two contrasting halves. In the first six months of the year, both buyer demand and the number of homes coming to market were running ahead of 2024 levels. That momentum faded in the second half as budget speculation intensified, although the total number of sales agreed over the year still finished 3 per cent higher than last year.
First-time buyers were a notable bright spot. Supported by falling mortgage rates and largely stagnant house prices, they were particularly active throughout 2025. According to Savills, first-time buyers borrowed a record £82.8 billion during the year — 30 per cent more than in 2024.
Lower mortgage rates fuel optimism
With activity slowing more sharply than usual at the end of the year, Rightmove expects a “bigger Boxing Day bounce” as buyers and sellers who paused their plans return to the market in early January.
Affordability conditions have improved in recent months, helped by lower mortgage rates, modest price reductions and looser lending rules. The average two-year fixed mortgage rate has fallen to 4.33 per cent, down from 5.08 per cent at the end of 2024.
Phillip Sandbach, managing director at John German Estate Agents in the Midlands, said he was anticipating a strong start to 2026.
“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,” he said. “I’m expecting a very busy start to 2026.”
Looking ahead, Rightmove is forecasting a “modest” 2 per cent rise in new seller asking prices next year. However, the company cautioned that early predictions should be treated carefully. This time last year, it was predicting a 4 per cent rise in asking prices for 2025 — a forecast that ultimately proved too optimistic.
