Average asking prices for newly marketed homes dropped by 1.8% in December, equivalent to £6,695, taking the typical asking price to £358,138. According to Rightmove, uncertainty surrounding the Autumn Budget weighed heavily on buyer and seller activity during the month.
Despite the seasonal slowdown, Rightmove remains optimistic about a strong rebound around Christmas. The property portal is forecasting a larger-than-usual surge in Boxing Day searches and new listings, alongside a projected 2% increase in seller asking prices during 2026.
Confidence is also being supported by expectations of an imminent Bank of England interest rate cut. A reduction in the base rate could improve mortgage affordability and help reignite buyer demand after a hesitant end to the year.
Financial markets are currently assigning a more than 90% chance of a rate cut at this week’s Bank of England meeting, according to AJ Bell’s head of investment analysis, Laith Khalaf. If confirmed, the base rate would fall from 4% to 3.75%, its lowest point in almost three years.
Khalaf noted that the last time the base rate started with a “three” was in early February 2023, shortly before rates were increased in response to inflationary pressures.
While house prices often dip in December, this year’s decline was steeper than the ten-year average fall of 1.4%. As a result, overall prices ended 2025 slightly lower, despite more resilient conditions earlier in the year. Regionally, the North West delivered the strongest annual growth at 2.6%, London prices were broadly unchanged, and the South West recorded a 2.7% annual fall.
Rightmove believes the slowdown was largely driven by prolonged speculation over potential property tax changes ahead of November’s Budget. Nearly one in five potential movers surveyed said they postponed plans until greater clarity emerged. Many of those delayed sellers are now expected to list their homes from Boxing Day onwards.
Colleen Babcock, property expert at Rightmove, said the market is set to benefit from the traditional post-Christmas uplift in activity. She explained that the “Boxing Day Bounce” typically sees people returning to their moving plans once the festive distractions have passed.
She added that each year, buyers head online immediately after Christmas to browse new listings and consider what a move could mean for the year ahead.
In London, where concerns over higher-value property taxation were more pronounced, the number of new sellers rose by 24% in the week following the Budget compared with the previous week.
Looking ahead, Rightmove expects 2026 to mirror the more active first half of 2025 rather than the quieter latter months. Improved affordability and a healthy supply of homes are expected to support this recovery.
Babcock said that slower price growth earlier in the year helped buyers stretch affordability, even after the April stamp duty deadline in England. However, she noted that uncertainty linked to Budget rumours from late summer onwards dampened confidence and pricing momentum.
Mortgage conditions have also improved. The average two-year fixed rate has fallen to 4.33%, down from 5.08% a year ago, while lenders have eased criteria following regulatory adjustments earlier in 2025. Rising wages and easing inflation are expected to further support affordability next year.
Babcock added that while activity is expected to strengthen in 2026, competition among sellers will remain high. As a result, realistic pricing and strong presentation will continue to be essential to attract buyer interest.
Data from Rightmove shows new seller numbers were 9% higher in the first half of 2025 compared with 2024, but fell 4% in the second half. Buyer demand followed a similar pattern, rising early in the year before declining later on. Even so, total sales agreed across 2025 finished 3% higher year-on-year.
Rightmove mortgage expert Matt Smith said an end-of-year base rate cut would be a welcome boost for confidence heading into the Boxing Day period. He added that buyers will enter 2026 with lower average mortgage rates than they faced at the start of 2025.
Claire Reynolds, UK head of sales at Strutt & Parker, said weeks of speculation ahead of the Budget slowed discretionary moves, but sentiment improved rapidly once the fiscal announcements were finally made.
Jordan Halstead, chief executive of Jordan & Halstead Estate Agents, described 2025 as two very different markets. He said the year began with strong momentum before slowing in the final quarter as buyers and sellers paused amid uncertainty.
Halstead added that well-priced homes have continued to sell, while properties struggling on the market tended to be those with unrealistic asking prices. He expects 2026 to deliver steady conditions with modest growth, as confidence improves and interest rates stabilise.
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