Demand for homes priced at more than £500,000 ‘dampens amid Budget speculation’

Home buyer demand for properties priced at more than £500,000 has softened in recent weeks, according to a website.

Zoopla said that, in terms of buyer inquiries, demand for properties priced at more than £500,000 had fallen in recent weeks by 4%, with a 7% decrease in new listings, compared with a year earlier.

Similarly, demand for homes priced at more than £1 million has fallen by 11%, while new listings were down by 9%, the website said.

The website analysed the five weeks to September 21 and compared it with the same period a year earlier.

The report said the data for higher-priced homes “is in sharp contrast to the rest of the market, where demand and supply remain stable”.

The website also said that house prices are rising faster in more affordable areas, with “static prices” in markets over £500,000.

Some buyers are adopting a “wait and see” approach ahead of the November Budget, the website said.

It also said that in London, the South East, South West and eastern England, higher stamp duty costs and affordability constraints are having a dampening effect on house price growth.

However, the number of sales agreed across the UK has been rising as buyers look to capitalise on the autumn market, Zoopla said.

The report said: “One in three homes currently on the market for sale is priced above £500,000, with 8% over £1 million.”

Annual house price inflation was running at 1.4% in August, but in markets with average house prices below £200,000 it was running at twice this rate, at 2.8%, the report said.

It added: “House price inflation remains weakest across southern England with prices rising by less than 0.5% across London, the South East, the South West and the east of England.

“All other areas of the UK are registering annual price inflation of between 1.4% and 7.9% in Northern Ireland. House prices in the North West are 3.1% higher.”

Zoopla recorded house prices as rising by more than 4% in five postal areas – Kirkcaldy (KY) in Scotland, Oldham (OL) in north-west England, Tweeddale (TD) by the Scottish Borders, Motherwell (ML) in Scotland and Llandrindod Wells (LD) in Wales.

Prices continue to register annual falls of more than 1% across southern England, led by Bournemouth (BH), Truro (TR), Exeter (EX) and Torquay (TQ) alongside parts of central London (WC and EC), the report said.

Richard Donnell, executive director at Zoopla, said: “The housing market has experienced a sustained increase in market activity over the last 18 months as mortgage rates have stabilised.

“The market is on track for the most sales since 2022, but without rapid house price inflation.

“Pre-Budget speculation over possible tax change is a regular occurrence but this summer it has been bigger than usual which has led some buyers and sellers to delay home moving decisions for homes priced over £500,000. The wider market remains largely unaffected.”

Mr Donnell added that “serious buyers” should bear in mind that “while the Budget is two months away it takes, on average, six to seven months to find a property and complete a sale”.

Kevin Shaw, national sales managing director at estate agency group and property services provider LRG (Leaders Romans Group), said: “The housing market has shifted in favour of buyers, with sellers increasingly willing to align with agents’ valuations and to negotiate on price.

“That balance is welcome for many purchasers, particularly first-time buyers who appear undeterred by April’s increase in stamp duty and have benefited from lower interest rates.

“At the upper end of the market, speculation over property tax has created hesitation.”

Mr Shaw added: “While tax speculation may leave 2025 relatively flat overall, the fundamentals are stable. A stronger spring market should emerge once fiscal policy is clarified and confidence returns.”