UK housing market slows as government considers new property tax measures

The UK housing market exhibits signs of slowdown amid speculation of increased property taxes ahead of the November budget, with potential measures threatening demand, especially in the upper market segments.

The UK housing market is showing clear signs of slowing down as the country approaches the November budget announcement, with speculation swirling around possible property-related tax increases. Data from Rightmove highlights a drop of 5% in both new buyers contacting estate agents and new sellers entering the market in September compared with the previous year, suggesting a growing sense of caution among potential movers. Traditionally, the post-summer period sees an uplift in activity, but this year’s anticipated bounce has failed to materialise, especially in the south of England where the high-end market appears particularly wary.

Rightmove’s October figures show only a modest 0.3% increase in the average price of properties coming to market, reaching £371,422, a figure well below the 10-year average October rise of 1.1%. Year-on-year, average asking prices have actually declined slightly by 0.1%, underscoring the market’s fragile state. Industry experts interpret this slowdown partly as a hangover from a strong September in 2024, which was significantly boosted by the Bank of England’s first rate cut in four years, setting a high benchmark for comparison. However, the prevailing tone is one of buyers and sellers “hitting pause” amid uncertainty over what tax measures Finance Minister Rachel Reeves might unveil.

Reeves herself has signalled a tough fiscal stance, insisting in a recent Guardian interview that those with the “broadest shoulders” will contribute their “fair share” in taxes. The Treasury is reported to be considering several options to increase government revenue from property, including a new tax on home sales above £500,000 and removing capital gains tax exemptions on primary residences valued over £1.5 million. Additionally, proposals for a new council tax band targeting higher-value properties in England are on the table. Labour MPs have urged the government to overhaul property taxation in the forthcoming budget, possibly introducing measures that could dampen demand, particularly in the upper reaches of the market.

This atmosphere of uncertainty is reflected in mortgage lending and consumer credit patterns as well. A Bank of England survey reported stable demand for mortgages through the third quarter of 2025 but expects little change in the last quarter of the year. Analysts attribute this plateau partly to market participants awaiting clarity on interest rates and to the looming prospect of tax hikes. The mortgage market, already contending with affordability challenges, is cautious, reflecting broader economic hesitancy.

Adding to the complexity, debates about supporting first-time buyers have gained prominence. Bellway’s chief executive, Jason Honeyman, has called for the abolition of stamp duty for first-time buyers and the introduction of a long-term deposit assistance scheme to address barriers to entry in the housing market. The current system requires first-time buyers in England to pay stamp duty on homes over £300,000 following the expiration of temporary relief earlier this year. Honeyman criticises the lack of government backing, highlighting that many young buyers lack family financial support. The Labour government, despite prioritising housing within its economic growth strategy, has not yet introduced such measures, while opposition figures like Conservative leader Kemi Badenoch have promised to scrap stamp duty for primary residence purchases if elected.

The government faces a difficult balancing act. On the one hand, it must address the UK’s housing shortage—aiming to build 1.5 million new homes by 2029, a target currently projected to fall short by 200,000 units. On the other, it must navigate the fiscal pressures stemming from high borrowing costs, weaker-than-expected economic growth, and significant public service funding demands. Reeves is anticipated to raise around £30 billion in her upcoming budget, with property and wealth taxes being part of the strategy. However, the Institute for Fiscal Studies warns that simply increasing tax rates without structural reforms could harm economic growth. Instead, the IFS recommends carefully targeted reforms that balance revenue generation with economic vitality.

While the Treasury insists the budget will “strike the right balance” between funding public services and promoting growth, uncertainty in the housing market remains palpable. Stakeholders across the sector—from buyers and sellers to lenders and developers—are awaiting the budget with cautious anticipation, knowing that its measures could reshape the dynamics of the UK property market for years to come.

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Source: Noah Wire Services

Noah Fact Check Pro

The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.

Freshness check

Score:
8

Notes:
The narrative presents recent data from October 2025, including Rightmove’s figures showing a 5% decline in new buyers and sellers compared to September 2024. The mention of Finance Minister Rachel Reeves’ upcoming budget announcement in November 2025 indicates timely reporting. However, similar themes have been reported in the past, such as the slowdown in the housing market due to tax uncertainties. ([reuters.com](https://www.reuters.com/world/uk/uk-housing-market-loses-momentum-ahead-budget-rightmove-says-2025-10-19/?utm_source=openai)) The report appears to be based on a press release from Rightmove, which typically warrants a high freshness score. No significant discrepancies in figures or dates were noted. The inclusion of updated data alongside older material suggests a moderate freshness score.

Quotes check

Score:
9

Notes:
Direct quotes from Finance Minister Rachel Reeves and Rightmove’s property expert Colleen Babcock are included. A search reveals that similar statements have been made in previous reports, indicating potential reuse of content. However, no identical quotes were found in earlier material, suggesting originality. The wording of the quotes varies slightly from previous reports, indicating some originality.

Source reliability

Score:
10

Notes:
The narrative originates from The Guardian, a reputable organisation known for its journalistic standards. The report cites data from Rightmove, a leading property website, and includes statements from Finance Minister Rachel Reeves, a government official. These sources are verifiable and credible.

Plausability check

Score:
9

Notes:
The claims about the housing market slowdown and potential tax increases are plausible and align with recent reports. The narrative includes specific data points, such as the 5% decline in new buyers and sellers, and mentions of potential tax measures like a new tax on home sales above £500,000 and changes to capital gains tax exemptions. The language and tone are consistent with typical reporting on economic matters. No excessive or off-topic details are present, and the tone is appropriately cautious given the subject matter.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary:
The narrative is timely and based on credible sources, with no significant issues identified in the checks. The report provides original content and presents plausible claims supported by verifiable data.