Uncertainty over the November Budget has driven a growing ‘wait and see’ attitude among home buyers, leading to the first annual fall in new sales agreed in two years, Zoopla’s latest house price index reveals.
The latest data shows the usual pre-Christmas slowdown has started six to eight weeks early, with buyer demand down 8% and sales agreed down 3% year-on-year.
Budget uncertainty and speculation over property tax reforms, including changes to Stamp Duty and Capital Gains Tax, is acting as a drag on sales agreed, especially for homes priced above £500,000.
Meanwhile, house price growth has slowed over the course of this year, currently standing at 1.3% which is broadly in line with the level a year ago, the latest Rightmove house price index reveals.
The average UK home is now worth £270,000, an increase of £3,600 over the last year.
More homes for sale and weaker demand has stalled house price growth across Southern England, while house price growth remains over 2% across Scotland, Wales and the northern regions of England.
Despite the current slowdown, two years of increased sales activity has created a sales pipeline of almost 350,000 homes, working their way to completion. These are valued at over £100bn, the largest pipeline of sales in over four years.
Zoopla executive director Richard Donnell says: “The housing market is experiencing a slowdown in activity but there are still serious sellers looking to buy homes and secure their next home purchase. Buying a home is a lengthy process and there are a record number of homes for sale which means lots of buyers looking for their next home.”
“The slowdown is modest and less severe than the impact of the 2022 mini budget. It’s early stage buyers adopting a cautious approach to new purchases ahead of the Budget with greater caution for those buying higher value homes. The housing market remains on track for the most housing sales since 2022 and house prices are set to end the year 1-1.5% higher than the start of 2025.”
Meanwhile, Propertymark chief executive Nathan Emerson says: “While a slowdown in new sales is to be expected ahead of the Budget, many of our member agents continue to report strong levels of motivated buyers and sellers who are simply pausing for clarity rather than exiting the market altogether.”
“Speculation around potential changes to Stamp Duty and Capital Gains Tax inevitably creates uncertainty, particularly at the higher end of the market, but the fundamentals remain stable. Employment levels are strong, mortgage rates have eased slightly, and the overall pipeline of sales remains robust.”
“Hopefully, the Chancellor recognises the importance of confidence and stability in the housing sector. Any reforms must provide long-term certainty and support for both buyers and sellers, not short-term measures that risk further hesitation. The UK Government has an opportunity next month to reinforce trust and momentum in the market as we head into 2026.”
