UK House Prices Drop Before Budget Announcement

With the Autumn Budget looming on 26 November 2025, the latest house prices figures released by Halifax indicate that there is caution in the housing market.  

In September, the average house price dropped by 0.3%, with buyers and sellers waiting to see whether the rumoured property tax rumours materialise. 

The 0.3% fall represented a decrease in price of £794, and the drop followed a 0.2% increase in August. 

The average UK house price in September was £298,184, which was an annual rise of 1.3%. Industry experts had expected a higher annual increase closer to 2.2%, but the upcoming Budget announcement has stalled would-be buyers and sellers who are choosing to wait. 

In London, the average annual house price increase was even lower at 0.6%. The possibility of stamp duty being replaced with an annual property tax could be driving caution in the market. 

The head of mortgages at Halifax, Amanda Bryden provided her insights on the current housing market situation: 

“While affordability remains a challenge, a relatively lower mortgage rate environment and steady wage growth have helped support buyer confidence. “ 

She also added “We continue to expect modest growth through the remainder of the year.” 

Inflation remains almost double the Bank of England’s target of 2%, and mortgage rates are still considerably higher than they were prior to the dramatic increases in 2022 and 2023. Buyers are waiting for some certainty from the Budget announcement before analysing affordability in the current economic climate. 

What else could the Autumn Budget include? 

In addition to property tax changes, there has been speculation that there could be an extension to the freeze of the personal allowance and tax thresholds beyond 5 April 2028. National Insurance contributions may also be applied to rental income and new Council Tax bands could be introduced. 

Another rumour circulating is that there could be a restriction on Private Residence Relief for high-value properties. With so many potential changes being speculated, buyer caution is to be expected.