According to Zoopla’s House Price Index for October, the market slowdown usually seen before Christmas started around 6-8 weeks early this year. It found that buyer demand was down 8%, while sales agreed had slipped 3% annually.
The decline in activity was even more notable against the backdrop of a strong Q4 in 2024 as people rushed to complete before the stamp duty change.
Tomer Aboody, director of MT Finance, said: “Despite cheaper rates, transactional levels remain stunted, and the housing market is subdued, primarily due to uncertainty surrounding next month’s Budget. Buyers at the higher end of the market, in particular, have been much quieter, waiting to see what’s in store before taking action.
“This further underlines the case for policymakers to either reduce or reform stamp duty in order to enable the market to properly function again, in turn strengthening the wider economy.”
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Higher-value homes hit by tax rumours
Zoopla said the downshift in market activity was more obvious across higher-priced homes, with a steeper fall in sales, listings and buyer demand for homes priced £500,000 and above.
This was most prevalent in Southern England, which has a larger share of higher-value homes. Zoopla said speculation that there could be council tax changes, an annual property tax to replace stamp duty and capital gains tax (CGT) on homes worth over £1.5m was causing people to pause their searches until they had some clarity from the Chancellor.
The weaker demand is affecting prices in the South, with Zoopla recording stalled growth across the region. In contrast, house price growth of more than 2% was recorded in Scotland, Wales and Northern England, maintaining the rate seen in the last year.
Nathan Emerson, CEO of Propertymark, said: “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.”
Regional differences in agreed sales
Although Zoopla recorded a 7% increase in the number of homes up for sale, the levels of sales differ across the regions.
In Scotland, this is up 3%, and in Yorkshire and the Humber, there is 4% more activity. However, in the South West, the level of sales is only 1% up on last year, similar to the West Midlands with a 1% increase.
However, relatively severe declines have been seen in other areas, such as Wales, with a 9% drop in sales agreed, the South East at 8%, the East of England at 6% and London with a 6% decrease.
Overall, house price growth has decelerated this year and is currently at 1.3%, in line with the previous year. The average price standard is at £270,000, up £3,600 over the last year.
Housing pipeline at £100bn
Although new business is easing, Zoopla found that two years of continuous rise in sales had resulted in an “historic” completion pipeline.
According to its data, there are nearly 350,000 homes – valued at over £100bn – currently going through the sales pipeline. The firm said this was the largest pipeline in over four years, and the backlog reflected the five or six months on average that it takes to complete a purchase.
This activity is being driven by sellers who are also buying, and strong first-time buyer demand supported by stability in mortgage rates.
The time it takes to find a new buyer has lengthened and stands at 37 days, 10% longer than a year ago.
Zoopla said the time to sales agreed was longer in Southern England, while this was faster in Northern England and Scotland.
Richard Donnell, executive director at Zoopla, said: “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.”
