Southern England sees first house price fall in 18 months – Zoopla

House prices have slipped across London and the South for the first time in 18 months, Zoopla’s data reveals.

But it warns that the Budget’s removal of a proposed property tax on homes above £500,000 offers relief for more than 210,000 sellers.

The property platform also says there has been a clear shift with buyer demand dropping 12% in the four weeks to 23 November, compared with the same period last year.

Sales agreed fell 4%, and the volume of homes coming onto the market rose, creating more choice but adding pressure to asking prices.

Buyers and sellers look forward

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.”

He added: “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.”

House price falls

London values fell by 0.1% year on year, matching the South East, and in the South West prices saw a 0.2% fall.

Agents report that the combination of political noise around property taxation and a jump in listings encouraged buyers to pause decisions.

Elsewhere, more affordable regions continued to edge upwards, with UK-wide prices up 1.3% year on year to an average of £270,200.

Areas in the North West posted annual growth of 2.9%, underlining the wider market’s resilience outside the southern hotspots.

New property tax fears

The key drag in southern England came from speculation that homes priced above £500,000 could face a new annual property tax.

That rumour alone slowed activity, affecting a large slice of the market where values typically exceed that threshold.

Zoopla’s data indicates that uncertainty was enough to cool sentiment and knock prices back after 18 months of steady rises.

However, the Budget landed without the feared plans for a new levy on higher-value homes.

Agents say this should trigger renewed confidence, particularly in the South where the £500,000 mark is routine rather than exceptional.

Buyers will return

The Budget outcome is expected to stimulate demand as the new year approaches.

With the threat of fresh taxes removed, Zoopla believes sellers who held off listing may push ahead.

And buyers who paused during the political speculation will return.

However, stamp duty remains a growing burden for many households.

The thresholds for existing owners have been unchanged since 2014, despite prices climbing 47% during that period.

This has created what analysts describe as fiscal drag, pushing average purchasers into higher stamp duty bands even when buying modest homes.