According to Rightmove, asking prices typically rise by around 1.1% from September to October, but the property listing firm put this muted increase down to a decade-high level of homes for sale.
Rightmove said this limited seller pricing power and it was also lower than the 0.4% rise seen in September.
The strongest increase was in London, where asking prices rose by 1.5% to an average of £685,497. The South East and North East saw no change, and declines were recorded in the North West, East Midlands and South West. The sharpest fall was recorded in Yorkshire and the Humber, where average asking prices dipped 1.1% to £255,830.
Housing market down compared to 2024
The firm said activity across the market was still resilient, but September saw a softening compared to the stronger market last year, which was boosted by the first base rate cut in four years and movers attempting to beat the stamp duty change.
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It was also suggested that uncertainty around announcements in the upcoming Budget could be curbing activity.
There was a 5% annual decline in both the number of new buyers enquiring about homes and the number of new sellers coming to market in September, while agreed sales were 2% lower than last year.
Looking at the year as a whole, Rightmove said new buyer demand was 2% higher so far, and the level of agreed sales was up by 5%.
Budget speculation is suppressing the market
Colleen Babcock, property expert at Rightmove, said even though the market was resilient this year, there was not enough pent-up momentum or recent positive sentiment to lead to the usual autumn bounce for asking prices.
She added: “We’re experiencing a decade-high level of property choice for buyers, which means that sellers who are serious about selling have had to acknowledge their limited pricing power and moderate their price expectations.
“In addition, speculation that the Budget may increase the cost of buying or owning a property at the higher end of the market has given some movers, particularly in the South of England, a reason to wait and see what’s announced in the Budget.”
Tomer Aboody, director of MT Finance, said: “What a difference a year makes. Twelve months ago, buyers and sellers in general were confident and positive due to the first Bank of England rate cut in four years, but now we are now seeing a very different market. Both buyers and sellers are subdued due to the uncertainty surrounding next month’s Budget.
“With the stamp duty concession, which made such a difference to the market ending earlier in the year, buyers at the higher end in particular have been much quieter, waiting to see what the Budget brings and whether there will be another rate cut in coming months.”
Aboody said some stimulus was needed for the market, whether it was a stamp duty or base rate cut. He said this was unlikely, but “either way, the market desperately needs a boost”.
Hamza Behzad, business development director at Finova, said: “Today’s house prices are sending a clear signal that the UK housing market is still under pressure. While buyer confidence is starting to return, it’s doing so cautiously, and the drop in prices highlights the challenges households face in an uncertain economic environment. On the flip side, competitive mortgage rates are helping, giving much-needed support to both first-time buyers and those looking to remortgage.
“Buyers are still acting cautiously, understandably waiting to see what Rachel Reeves’ Budget will bring next month. In the meantime, policy changes are already reshaping the market. The upcoming Renters’ Rights Bill is prompting some landlords to sell ahead of new regulations, giving buyers more choice. Stamp duty adjustments have also influenced affordability. Sales volumes have bounced back since the end of temporary stamp duty relief, but any tax rises in the Budget could dent disposable incomes and put further pressure on the housing market next year.”
Stable mortgage rates supporting activity
Matt Smith, mortgage expert at Rightmove, said lenders had hit pause leading up to the Budget, with some rises and falls in rates.
Smith added: “The cost of financing mortgages has come down again, so we’re likely to start seeing some very gradual drops in average rates soon. However, until the Budget at the end of November, we’re likely to see a very quiet market with few shifts in rates, as lenders wait to see how they may be affected by any policy announcements. Average mortgage rates, particularly two-year fixed rates, are still lower than they were a year ago.
“Combined with flat house prices and improved lending criteria, many homemovers may find their affordability significantly improved compared with last year.”
Tom Bill, head of UK residential research at Knight Frank, added: “Transaction numbers over the last six months have been supported by stable mortgage rates and softer prices as sellers come to terms with the fact that high levels of supply mean it is a buyer’s market.
“However, demand is wavering for the second successive year as the autumn market gets underway [this] year, as speculation over the Budget becomes a prolonged and frustrating game of ‘guess the tax rise’.”
