Uncertainty over November’s Budget is prompting many home buyers, particularly first-time buyers, to adopt a “wait and see” approach. According to Zoopla’s latest House Price Index, this caution has contributed to the first annual decline in new sales agreed in two years, compared with October 2023.
The pre-Christmas slowdown in the housing market has arrived six to eight weeks earlier than usual, with buyer demand down 8% and sales agreed down 3% year-on-year. The decline follows a strong final quarter in 2024, when many buyers rushed to complete transactions before stamp duty relief ended in April 2025.
Budget uncertainty drives wait and see approach on sales and buyer demand
Despite seven 7% more homes for sale than a year ago, the regional performance in sales varies. Sales are still up in Scotland (3%), Yorkshire & the Humber (4%), the South West (1%) and the West Midlands (1%). However, Southern England and Wales are experiencing a sharper slowdown in new sales being agreed, dropping in Wales (9%), the South East (8%), the East of England (6%) and London (5%).
House price growth has slowed over 2025, currently standing at 1.3% which is broadly in line with the level a year ago. The average UK home is now worth £270,000, an increase of £3,600 over the last year.
The slowdown in market activity is concentrated in the higher sales price bands, with a sharper decline in sales, listings and buyer demand for homes priced above £500,000. The drop in new sales is most pronounced 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 capital gains tax on purchases over £1.5 million, has prompted early-stage buyers to pause their search until after the upcoming Budget.
This weaker demand and affordability squeeze in the South is directly impacting price growth. House price growth has virtually stalled across southern regions of England, limiting price increases. In sharp contrast, price growth remains robust across the rest of the country, running at over two per cent in Scotland, Wales and the northern regions of England, broadly maintaining the growth rate seen last year.
House price growth stalls in the south and continues across rest of the country
While the market for new business is starting to slow, two years of a sustained increase in sales activity have created a historic completion pipeline. There are now almost 350,000 homes, valued at over £100 billion, currently working through the sales process, the largest pipeline in over four years (since May 2021). This backlog reflects the fact that it takes five to six months on average to complete a purchase, and is sustained by sellers (many of whom are also buying) and strong first-time buyer demand, both encouraged by recent stability in mortgage rates.
Largest sales pipeline for four years
However, the speed of finding a new buyer has decelerated. The average time to sell now stands at 37 days, approximately 10% longer than a year ago. Sales take notably longer across southern England, reaching 45 days in London (20% longer than last year). Northern England and Scotland continue to see the fastest sales activity, a reflection of stronger ongoing demand. This regional difference underlines the importance of realistic pricing for sellers, as homes requiring price reductions typically take much longer to sell.
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”.
Read the orginal article: https://propertyindustryeye.com/buyers-and-sellers-adopt-wait-and-see-stance-amid-budget-uncertainty/
