A surge in buyer demand is defying the typical summer housing market slowdown, accompanied by a rise in agreed sales and a record number of homes on the market. The latest House Price Index from Zoopla shows a year-on-year increase of 11% in demand and 8% in agreed sales, with an average of 37 homes for sale per estate agent branch.
Zoopla attributes recent changes to the way lenders assess mortgage affordability to the increased activity, with buyers now able to borrow up to 20% more than they could just three months ago.
‘This has encouraged more buyers to try and secure a home purchase before the summer and is why buyer demand and sales agreed are higher across all regions and countries of the UK’, the property website said.
However, significantly more home buyers are paying stamp duty in England and Northern Ireland, according to Zoopla’s most recent figures. The company explained:
“A total of 83% of homeowners now pay stamp duty on new purchases, compared to less than half (49%) before April 2025. The extra cost is up to £2,500 per sale, around 1% of the average UK home price. Buyers will be looking to reflect these increased buying costs in what they offer for homes, ultimately impacting agreed sale prices.”
The number of first-time buyers now liable for stamp duty is 41% – compared to just 19% before April. Homes in London and other areas in southern England are feeling the impact more than other regions: stamp duty on an average-priced first-time buyer home in London is now £6,100, compared to zero before the changes.
Richard Donnell, executive director at Zoopla, said the figures reinforce a buyers’ market. He commented:
“The housing market is broadly in balance. We’re seeing healthy levels of demand and sales, but this isn’t sparking faster price inflation. In fact, more homes for sale, particularly across southern England, is re-enforcing a buyer’s market, keeping price rises in check.
“Many more home buyers are paying stamp duty since April and want this extra cost reflected in the price they pay. While mortgage rates are holding steady, less stringent affordability testing has boosted buying power and is supporting more sales despite increased uncertainty.”
The house price index house reveals the annual rate of price inflation has now fallen to just 1.3%, with the average UK house now £268,400. Price growth is up from 0.4% last June, but this remains almost half of the 2.1% seen in December 2024.
However, prices and growth rates continue to vary drastically across regions. Inflation is growing fastest in northern regions of England, Scotland and Wales, typically around 2-3% annually. That jumps to 6.1% in Northern Ireland and reaches 7.8% in Belfast.
In the more expensive southern regions of England, inflation is 0.2% in the South East and London, and 0.3% in the South West. Truro, Torquay and Exeter are all experiencing minus figures, with -1.3%, -1.2% and -1.1% respectively.
The inflation slow-down has prompted Zoopla to adjust its annual forecast from 2% to 1%, although the company said it anticipates 5% more sales in 2025 than last year.
Donnell added:
“At the start of the year, we predicted house prices would rise just 2%, at the lower end of forecasts for house price inflation. Prices are on track to be 1% higher over 2025, half the level forecast. Greater supply of homes for sale and mortgage rates remaining higher than expected are the key reasons for weaker growth.
“Low house price inflation is not a bad thing so long as there is enough market confidence for people to list their homes and make bids to buy homes.”
Propertymark CEO Nathan Emerson welcomed the continued resilience of the market but warned the government needs to assess the long-term impact of stamp duty costs.
He commented:
“As the year advances, it remains upbeat to witness greater levels of market activity when compared to only twelve months earlier. Both affordability and consumer confidence continue to steadily improve, with more competitive mortgage products gradually finding their way to the market.
“However, higher stamp duty costs have impacted house prices in some cases, and this is creating additional regional disparities in terms of house price growth. The UK Government may need to reconsider the real world effects that increased Stamp Duty thresholds across England and Northern Ireland have caused, to better invigorate the market across the long-term.
“It remains vital the UK Government and devolved administrations meet their individual housing targets to keep pace with anticipated demand over the forthcoming years and to ensure there is a viable mix of affordable housing constantly flowing into the marketplace for those who aspire to buy.”
David Powell, CEO of Andrews Property Group, agreed the market continues to show ‘incredible resilience’ as it finds its ‘new normal’ post-stamp duty changes. However, he warned the slow down could impact consumer confidence.
‘Without a reduction in interest rates or Government intervention its difficult to see any material change for H2’, he said.
“The obvious and immediate route is to create a more palatable and permanent solution to stamp duty to help ignite the market. The Government will certainly need a more flamboyant market to provide confidence to developers to build towards the targeted 1.5 million homes. The affordability challenge to buyers remains and I would advocate for immediate remedies to help consumers buy with confidence.”
Zoopla’s stamp duty criticism comes just days after Rightmove’s CEO Johan Svanstrom urged the government to reform the tax to help more people onto the property ladder, saying:
“It should consider consumer support measures, by retaining the current first-time buyer stamp duty relief threshold of £425,000 in England, and looking at solutions to help first-time buyers with not only their deposit, but also being able to borrow enough from a lender. Mobility and housing is an important growth engine for the overall economy.”
