UK house prices have recorded their biggest August drop since 2018, with the average price falling by two per cent this month to £364,999. Property portal Rightmove reported that this decline comes amid fears of potential tax rises in the upcoming Budget.
Annually, house prices are down one per cent, marking the largest yearly drop since December 2023. London's housing market has been particularly affected, with prices in the capital falling by 3.1 per cent in the year to August.
Rightmove has revised its national house price growth forecast to between zero and minus two per cent. The firm cited an uncertain geopolitical picture, changes in mortgage rates, and the new Chancellor's first Budget in October as factors making predictions difficult for the rest of the year.
Colleen Babcock, a property expert at Rightmove, noted that Londoners face significant affordability challenges due to high stamp duty fees and the £450,000 cap on lifetime ISAs, which impacts first-time buyers in the capital. Tom Bill, head of UK residential research at Knight Frank, added that rising mortgage rates and Budget tax uncertainty are curbing demand, particularly in areas where affordability is already stretched.