The latest figures from Zoopla show that momentum in the housing market is fading. Annual growth in UK residential property prices slipped from 1.9% in December 2024 to just 1.4% in August.

Much of the slowdown is being blamed on uncertainty around the upcoming Budget. Talk of potential tax changes is discouraging activity at the upper end of the market, where demand for homes above £500,000 has fallen by 4% and new instructions have dropped by 7% in the past five weeks. The million-pound-plus sector has been hit hardest.

By contrast, lower-value markets are proving more resilient. Where average prices sit below £200,000, annual growth is running at 2.8%. In areas with average prices above £500,000, values have been largely flat. Despite this cooling in growth, transactions are still on course to reach their highest level since 2021.

Market Views

A quick search from various analysts and experts suggests the following general views.

• Shift towards buyers – Sellers are more willing to price realistically and negotiate, giving buyers, particularly first-time purchasers, more opportunities.
• Uncertainty at the top end – Speculation about property tax changes has made wealthier buyers cautious, leading to hesitation in higher-value segments.
• High supply – Landlords leaving the rental sector and delayed sales from last year have boosted stock levels, meaning sellers may need to adjust expectations to attract viewings.
• Affordability pressures – While slower price growth is welcome, inflation, stagnant wage growth, and Stamp Duty changes continue to weigh on buyer confidence.
• Seasonal reassessment – Many buyers used the summer to review budgets and refine searches, but with fewer new listings, competition for well-priced homes remains strong.

Outlook

The housing market is currently split. Affordable regions are showing resilience, while higher-value areas remain cautious until the Budget clarifies tax policy. Buyers have gained more leverage, but the fundamentals remain stable, with transactions on track to hit a three-year high.

If interest rates ease further and fiscal uncertainty clears, some confidence could return in early 2026. Until then, expect steady sales, but limited price growth.