Housing market sees first drop in new sales in two years amid Budget uncertainty

The housing market has recorded its first annual fall in new sales in two years, as house price growth slows to 1.3%, according to Zoopla’s House Price Index.

The findings reveal with less than a month to go till the Autumn Budget, house buyers are adopting a wait-and-see approach.

Zoopla claims media speculation over stamp duty reforms is acting as a drag on sales agreed, especially for homes priced above £500,000.

Decline in new sales

According to Zoopla’s House Price Index, there has been a decline in new sales, particularly across southern England.

The property portal says speculation around replacing stamp duty with an annual property tax has prompted early-stage buyers to pause their searches until after the upcoming Budget.

Zoopla reports that weaker demand and an affordability squeeze in the South are directly impacting price growth. The usual pre-Christmas slowdown has started six to eight weeks early, with buyer demand down 8% and sales agreed down 3% year-on-year.

House price growth has almost stalled across Southern regions of England, limiting further price increases.

Areas seeing the sharpest slowdown in new sales include Wales (down 9%), the South East (8%), the East of England (6%) and London (5%).

Early-stage buyers adopting a cautious approach to new purchases ahead of the Budget

However, despite the slowdown in activity in some regions, house price growth and sales remain positive elsewhere.

Sales are still rising in Scotland (up 3%), Yorkshire & the Humber (4%), the South West (1%) and the West Midlands (1%).

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 are 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 per cent higher than the start of 2025”.

Mr Donnell adds despite the current slowdown, two years of increased sales activity have created a sales pipeline of almost 350,000 homes, working their way to completion, these are valued at over £100 billion, the largest pipeline of sales in over four years.