ONS: Uncertainty over the Autumn Budget causes a September decline in UK home prices

According to the most recent Land Registry data, the UK housing market is being affected by budget rumors

According to Office for National Statistics (ONS) data, average home prices fell in September and slowed annually as the housing market is hampered by budget uncertainty.

Average property values decreased by 0.6 percent between August and September, according to the most recent ONS House Price Index, which is based on Land Registry data. This is the first decrease since April 2025.

The annual rate of price growth decreased from 3.1 percent in August to 2.6 percent.

Accordingly, the average cost of a home in the UK is 271,531.

Prior to the budget and the pressures of affordability, Richard Donnell, executive director of research at the real estate website Zoopla, blamed uncertainty.

"Pre-Budget jitters are impacting housing market activity at the beginning of the home buying process," he stated. As buyers put off making a purchase, demand and agreed-upon sales for homes over £500,000 have decreased by up to 9% from this time last year.

"As the sale of 350,000 properties moves closer to completion, some buyers of pricey homes will be anxious about potential changes to council tax for their new purchases. The "

The Land Registry statistics are outdated, but according to Jason Tebb, president of the real estate website OnTheMarket, they indicate that the market is somewhat cautious and price sensitive.

"With the Budget approaching, we urge policymakers to focus on stability, assisting confidence, and supporting the housing market, which is so vital to the wider economy," he stated. A "

What is the current state of UK home prices?

The housing market, according to many analysts, has been on hold in recent months due to speculation about potential changes to property taxes in the budget.

Some buyers have already been discouraged by lower stamp duty thresholds since April, and rumors of changes to stamp duties and even a mansion tax in the budget seem to have increased reluctance, which has affected demand and lowered average prices.

In the year ending in September 2025, average home prices rose by 2% in England, 2.7% in Wales, and 5.3% in Scotland.

In July and September of 2025, Northern Ireland saw an annual increase of 7.1%.

Yorkshire and The Humber saw the biggest annual increase in house prices among the English regions, rising by 4.5 percent.

The English region with the lowest annual inflation was London, where prices fell by 1.8% in the year ending in September 2025.

The chairman of Martyn Gerrard Estate Agents, Simon Gerrard, attributed the decline in London home prices to inadequate government messaging regarding budgetary changes.

"Another week brings another turn of the rumor mill," he stated. We now know that the government will attempt to tax high-value properties instead of raising income taxes. This was proposed during the summer, but it was quickly abandoned when it became clear that the idea was absurd.

"These policies will harm upward mobility, distort the whole housing market, and fail to generate the anticipated funds. This will worsen the difficulties second steppers already face in climbing the ladder. Gumming up the real estate market only hurts government revenue and reduces transactions.

"Families in London will be severely impacted by this tax. Let's call it what it is: a tax in London. For many years to come, it will be nearly impossible to start a family in the capital. The "

Will home costs increase in 2025?

Since there are differences by region and type of property and no one actually lives in a typical house, average house price data can be misleading.

However, the majority of analysts concur that home prices are moving in a slower direction.

Some have even changed their predictions; Knight Frank, an estate agency, now projects that average UK mainstream prices will increase by 1% in 2025, as opposed to 3.5% in May.

According to Zoopla, the average increase in UK home prices is expected to be between 1% and 1.5%.

"As affordability pressures bite, the latest house price index data shows a slowdown in house price and rental inflation," Donnell continued. It's anticipated that this slowdown will last until 2026. Rents are rising at their lowest level in four years due to an increase in first-time buyers and a decrease in migration for work and education.

"Everyone is looking forward to next week's budget. If the housing market improves, we anticipate a surge in demand and activity, but if the impact on consumer confidence is more severe, we may have a slow start to 2026. A "

Jonathan Handford, managing director of Fine and Country, noted that while headline growth in England has slowed, stronger increases in Wales, Scotland, and Northern Ireland demonstrate a far from homogeneous market.

He stated: "Serious, needs-based movers are driving activity, and September's transaction levels, up 4% year over year, highlight that momentum.

"Yes, some people are hesitant due to the uncertainty surrounding the Autumn Budget, particularly at the top end where tax changes are a concern, but the fundamentals are still positive.

"A more balanced market is a result of increased stock, stable demand, and rising real incomes. As we approach 2026, we anticipate a modest but steady pace of activity, assuming the economic environment continues to stabilize. The "