London house prices slump following Budget chaos
London house prices have fallen by more than two per cent year on year, as Budget chaos took its toll on a volatile housing market.
The average house price in London for October was £547,000, down 2.4 per cent from the previous year, according to the Office for National Statistics (ONS).
Property experts said this reveals the vulnerability of the capital’s housing market, following months of uncertainty in the lead up to the Budget.
Amy Reynolds, sales head at Richmond agency Antony Roberts, said: “In London, where affordability and sentiment are highly rate-sensitive, even small shifts in expectations can have an outsized impact on activity.”
Richard Donnell, executive director of property website Zoopla, said: “Slower house price inflation reflects higher stamp duty costs for home buyers and the impact of Budget uncertainty on the market with annual price falls across London.”
Housing market weathers Budget storm
Across the UK, however, house prices have stabilised as the market returns to normal after the Budget speculation over the autumn.
Average house prices across the UK increased by 1.7 per cent year on year to £270,000 in October 2025, down slightly from the two per cent annual growth rate to September.
Property experts expect a flurry of activity after Christmas, with the normal ‘Boxing Day bounce’ boosted by post-Budget relief for buyers and a more certain policy environment.
Annual house price inflation was highest in the North East of England, with a five per cent spike in prices to £163,000.
In England as a whole, house prices were up one per cent year on year in October, to £292,000.
Property experts said the figures are proof of a resilient housing market, which has been affected by swirling rumours about stamp duty overhaul in the run-up to the Budget and uncertainty ahead of the incoming Renters Rights Act.
The Budget saw Rachel Reeves announce a mansion tax surcharge on houses above £2m in value, while the Chancellor stopped short of more dramatic reforms to the council tax system.
Interest rate cuts to boost confidence
Estate agents and sellers hope for increased activity in the new year, with buyers given new confidence by the interest rates cut which the Bank of England is widely expected to deliver tomorrow.
Paresh Raja, CEO of Market Financial Solutions, said a rate cut would give buyers and investors a “meaningful” confidence boost.
“But even if rates are held, the market is still well placed to make progress, as long as lenders remain proactive.”
Reynolds said: “The outlook for the London property market in particular is becoming more constructive.
“Price growth has been muted, particularly at the upper end, but values have broadly stabilised as buyers adjust to higher borrowing costs.”
Jeremy Leaf, a north London estate agent and former chair of the Royal Institution of Chartered Surveyors (RICS), said: “The continuing pattern of up-a-bit, down-a-bit, in house prices is not surprising but could have been considerably worse bearing in mind intense speculation about the contents of the Budget over the past few months.”