Market activity cools as buyers await fiscal decisions
Uncertainty over the forthcoming November Budget has led many prospective homebuyers, particularly those at the outset of their property search, to delay decisions. This cautious approach has contributed to the first annual decrease in newly agreed sales since October 2023, according to the latest House Price Index from Zoopla.
The usual seasonal slowdown in the housing market has arrived six to eight weeks ahead of schedule, with buyer demand falling by 8% and agreed sales down 3% compared to the previous year. This decline has been accentuated by a strong end to 2024, when buyers sought to complete transactions before the end of stamp duty relief in April 2025.
Despite a 7% increase in the number of properties available for sale compared to last year, regional trends are mixed. Sales activity remains positive in Scotland (up 3%), Yorkshire & the Humber (up 4%), the South West (up 1%), and the West Midlands (up 1%). Conversely, Wales and southern regions of England have seen sharper declines, with new sales agreed down 9% in Wales, 8% in the South East, 6% in the East of England, and 5% in London.
House price growth has moderated in 2025, currently at 1.3%, broadly consistent with the previous year. The average UK property is now valued at £270,000, marking a £3,600 increase over the past 12 months.
Higher value homes affected by tax speculation
The slowdown is most evident in the upper price brackets, with notable reductions in sales, listings, and buyer interest for homes priced above £500,000.
Southern England, where higher-value properties are more prevalent, has experienced the steepest declines. Anticipation of possible tax changes—including potential reforms to council tax, the replacement of stamp duty with an annual property levy, and the introduction of capital gains tax on purchases exceeding £1.5 million—has led many early-stage buyers to postpone activity until after the Budget.
This reduced demand and affordability pressure in the South has limited price growth in the region. In contrast, property values continue to rise at over 2% in Scotland, Wales, and northern England, maintaining last year’s pace.
Sales pipeline reaches four-year high
While new business is beginning to slow, the market is processing a substantial backlog. Nearly 350,000 homes, collectively valued at over £100 billion, are currently moving through the sales process—the largest pipeline since May 2021. This reflects the typical five to six month period required to complete a purchase and is supported by sellers who are also buyers, as well as sustained first-time buyer interest, both aided by recent stability in mortgage rates.
However, the time taken to secure a buyer has increased. The average period to sell is now 37 days, around 10% longer than a year ago. In London, this extends to 45 days, a 20% rise year-on-year. Northern England and Scotland continue to see the quickest sales, indicating stronger demand. These regional differences highlight the importance of accurate pricing, as properties requiring reductions generally take longer to sell.
“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,” said Richard Donnell (pictured right), executive director at Zoopla. “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.”
Nathan Emerson, chief executive of industry body Propertymark, said that while a slowdown in new sales is to be expected ahead of the Budget, many of their 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,” Emerson noted. “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.”
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