House prices fall for the first time in 18 months across southern England, but threat of new property tax removed from 210,000 homes.
House prices in London and the South recorded their first fall in 18 months, driven by budget uncertainty and more homes for sale, boosting choice for home buyers
UK-wide buyer demand drops 12% year on year, whilst sales agreed fall 4% amidst Budget uncertainty
Post-Budget relief for 210,000 sellers - as the threat of an annual property tax on homes over £500,000 is lifted - is expected to boost market activity at the start of 2026
Stamp duty ‘fiscal drag’ sees more average home buyers paying higher stamp duty, adding to the cost of buying particularly across southern England
Rumours of more taxes on homes over £500,000 in the run up to the Budget, has created uncertainty across the housing market, leading to a 12 per cent decline in buyer demand and fewer sales agreed in the four weeks up to 23rd November, compared with last year.
The Budget’s impact on house prices has been felt across southern England where, for the first time in 18 months, there has been a year on year fall in house prices across London (-0.1%), the South East (-0.1%) and the South West of England (-0.2%).
In contrast, the broader UK housing market continues to show resilience despite Budget-related speculation. Average UK house prices have increased by 1.3 per cent year on year with the average price of £270,200. Most regions and counties outside the south of England are registering above average price inflation with home values in the North West of England 2.9 per cent higher than a year ago.
Download the Zoopla House Price Index - November 2025 (PDF, 356 KB)
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 210,000 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.
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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.
Commenting on the report, 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.”
David Powell, CEO of Andrews estate agent said: “After months of speculation, I am disappointed the Government has missed this opportunity to address the challenges around stamp duty and affordability. There will be much disappointment around the £2m+ mansion tax and it’s likely the South will get hit the hardest, we will eagerly await how this impacts the market and the unintended consequences that may follow.
“I suspect house price growth in the South may remain static in the short term whilst the market adjusts to the new normal. I expect the market to bounce back from any damage caused by leaked or shelved policies leading up to the Government’s Budget and we will see activity levels increase across the South throughout 2026.”
The Zoopla House Price Index (HPI) tracks the change in achieved sale price of homes - not asking prices. The index uses sold prices, mortgage valuations and data for recently agreed sales, with more input data than any other index. The methodology is designed to accurately track the change in pricing for UK housing. It’s a revisionary index and non-seasonally adjusted.
Additional notes on this month’s data:
Buyer demand, sales agreed and number of homes for sale compare the four weeks to 19 October 2025 vs same period in 2024
Time to sell is from a property first listed for sale to the sale being agreed (sold subject to contract) - not completion, which takes a further 5 to 6 months on average.
The sales market in Scotland operates differently - homes are marketed with a survey - and the time to sell is faster than England and Wales.
Past House Price Index reports
We try to make sure that the information here is accurate at the time of publishing. But the property market moves fast and some information may now be out of date. Zoopla accepts no responsibility or liability for any decisions you make based on the information provided.
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