The traditional seasonal slowdown in homebuyer demand in the run up to Christmas has come six to eight weeks earlier than usual as buyers adopt a ‘wait and see’ approach to moving home ahead of the budget on 26th November.
A first annual fall in sales is reported by property website Zoopla in its latest House Price Index as buyer demand is down 8% and sales agreed down 3% year on year.
The property portal said uncertainty over the upcoming budget and speculation over property tax reforms, including potential changes to Stamp Duty and Capital Gains Tax is acting as a drag on sales agreed, especially for homes priced above £500,000. House price growth has slowed over 2025, currently standing at 1.3 per cent which is broadly in line with the level a year ago. But comparisons to this time last year are unfavourable added Zoopla as the final quarter of 2024 saw a flurry of activity as home movers rushed to try and beat the March stamp duty reliefs deadline.
The good news though is the current sales pipeline of almost 350,000, built up over the last two years, are working their way through to completion. The strongest sales pipeline in over four years is valued at over £100bn said Zoopla. There are 7% more homes available for sale than a year ago which provides buyers with more choice and puts pressure on house pricing. The recent strength of the first time buyer market continues to be important to ongoing transactions said Zoopla. The average UK home is now worth £270,000, an increase of £3,600 over the last year.
There is a stubbornness to the higher value homes market with ‘pronounced’ drops in volumes across southern England where higher-value properties make up a larger share of the market. Speculation around potential tax reforms in England, including changes to council tax, replacing stamp duty with an annual property tax, and introducing a ‘mansion tax’ on purchases over £1.5 million, has prompted early-stage buyers to pause their search until after the upcoming Budget.
That speculation, allied to the increase in homes for sale and choice for buyers has led to a 10% increase in the time it takes to sell said Richard Donnell, Executive Director at Zoopla:
“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 per cent higher than the start of 2025”.
