Property market slows as overpriced homes linger – Zoopla

The UK’s housing market is witnessing a period of slowing growth, with average house prices rising by 1.3% compared to last year, reaching £270,600.

That’s according to Zoopla’s latest House Price Index which highlights that growth at the start of the year was 2.1%.

The platform says this reflects a buyer’s market and affordability challenges persist, particularly in southern England.

Zoopla adds that homes needing a price reduction take 2.4 times longer to find a buyer than those listed accurately.

Price accurately

Richard Donnell, the firm’s executive director, said: “There is plenty of demand for homes and more people are looking to move.

“However, buyers also have much greater choice to choose from, especially across areas of southern England.

“There is a clear link between buyer choice and price inflation and how long it is taking homes to sell.”

He added: “Sellers need to understand local market conditions when considering how to market their home, setting the right price and how quickly they would like to sell.

“The risk of being too ambitious on price is your home taking more than twice as long to find a buyer – or not selling at all.”

Home prices dropping

Zoopla also says that one in 10 homes last month saw a price cut, which is up from the five-year average of 6%.

Regional disparities see Northern England, including the North West and North East, benefiting from lower supply and better affordability.

Sales there took an average of 27 days in July, 23% quicker than the national average of 35 days.

This has driven stronger price growth, with increases of 2.7% and 2.1% respectively in these regions.

Tax change worries

However, southern regions face a surplus of homes and higher prices, leading to slower sales averaging 39 days and subdued price growth of 0.3% in the South East and South West.

Speculation about potential tax changes is adding uncertainty, particularly for higher-value properties, Zoopla warns.

Discussions around replacing stamp duty with an annual property tax for homes valued at more than £500,000 and introducing capital gains tax for main residence sales above £1.5 million, could hit buyer behaviour.

With a third of homes for sale priced above £500,000, particularly in London and the South East, some buyers may adopt a cautious approach ahead of the Autumn Budget.

Unsold homes

Coastal areas in southern England, such as Truro, Exeter, and Bournemouth, are seeing a high volume of unsold properties, with a quarter of homes lingering for more than six months.

This is partly due to an influx of second homes for sale, prompted by higher council tax rates, which has driven prices down by 1.1% to 1.4% in these areas.

Other regions with significant unsold stock include York, Torquay and Llandrindod Wells, where realistic pricing is critical for sellers aiming to move in 2025.

Meanwhile, areas like Dundee, Wolverhampton and Northampton, there’s a shortage of available homes, creating a more competitive market for buyers.

Despite these challenges, sales activity remains robust, with a 5% increase in agreed sales compared to last year.

Zoopla anticipates house price inflation to hover between 1.5% and 2% for the remainder of 2025, with 1.15 million sales projected, a 5% rise from the previous year.

Property sector reaction

Matt Thompson, the head of sales at Chestertons, said: “Buyers used the summer holidays to review their finances and refine their search criteria or started booking viewings of homes they already shortlisted.

“The number of properties coming onto the market, however, has clearly decreased.

“Whilst there was a substantial increase in landlords selling up amid the Renters’ Rights Bill earlier this year, it was considered a momentary uplift that has now rebalanced.

“As a result, buyers might find it more challenging to secure a property within their budget and are advised to start their property search as early as possible.”

Nathan Emerson, the chief executive of Propertymark, said: “Stable house prices within the housing market are a welcome sign for groups such as first-time buyers, who can better take advantage of a period of steadiness.

“Despite property transactional taxes increasing in some nations and financial and economic pressures continuing for many, there still seems to be plenty of property choice for buyers.

“It remains important that sellers continue to have realistic price expectations and place their property on the market accordingly to help empower an efficient sales process.”