Speculation over property tax changes ahead of the November Budget has contributed to a drop in buyer demand and sales agreed across the country, according to Zoopla’s latest House Price Index.
The uncertainty has driven year-on-year falls in house prices across London and southern England for the first time in 18 months, while more affordable areas continue to see price growth.
Rumours of additional taxes on homes over £500,000 prompted a 12% decline in buyer demand and fewer sales agreed in the four weeks up to 23 November, compared with last year. The impact has been most pronounced in southern England, with London and the South East down 0.1% and the South West down 0.2% year on year.
Meanwhile, the wider UK housing market remains resilient, with average prices up 1.3% to £270,200, and regions outside the south, such as the North West, recording 2.9% annual growth.
Year on year house price inflation by English region and country
The market uncertainty that plagued the past few months has been largely dissolved following the Autumn Budget, with the measures directly impacting the housing market proving less significant than many home owners had feared from the speculation.
Crucially, the shelving of any proposals for a new annual property tax on homes over £500,000 will be welcome relief for the owners of the 210,0002 homes for sale above this level across the UK. The removal of the threat of extra taxes is set to deliver a much needed boost to buyer demand and overall market activity at the start of 2026. Sellers in southern England will see the greatest boost as more homes for sale are above £500,000 – this is important at a time when house prices are under pressure from a greater supply of homes for sale.
Proportion of homes currently for sale over £500,000 by region & country:
While the threat of wider tax changes impacting the mainstream housing market has been removed, stamp duty remains a significant hurdle for home buyers, especially in southern England. The stamp duty price thresholds for existing home owners were set in 2014, while house prices are 47% higher over this time. This is creating ‘fiscal drag’ for home buyers in the housing market with buyers of average priced homes paying more
Since 2019, the number of homes bought by existing homeowners where the cost of stamp duty is more than 2.5% of the purchase price has jumped from 21 per cent to 33 per cent. The cost of buying is growing for average home buyers in towns across the south of England and the case for the abolition of stamp duty as part of wider property reforms remains a strong one.
Richard Donnell, executive director at Zoopla, said: “The Budget bark was worse than the Budget bite for the housing market. Home buyers and sellers will welcome the end of the uncertainty that has stalled housing market activity since the late summer. Our data shows the underlying demand to move home remains strong. With greater certainty we expect a rebound in housing market activity that builds into the new year with households who paused home moving decisions over recent months return with greater confidence.
“The removal of the threat of a new annual property tax from 210,000 homes is particularly positive for the market and will help revive activity in higher-value areas across southern England where house prices are under pressure.”
UK-wide buyer demand and sales in the past 4 weeks
Table 4: % of Stamp Duty paid on house purchases in 2019 vs 2025
