House price growth has continued to slow, down from 1.9% in December 2024 to 1.4% in August, Zoopla’s newest home price index reveals.
It discovered the typical UK house is now price £271,000, a rise of £4,350 over the past yr.
However, the index exhibits that pre-Budget tax hypothesis is impacting market exercise after demand for properties over £500,000 dropped by 4% with a 7% discount in new listings over the past 5 weeks.
There has additionally been an influence on homes over £1m, as demand fell by 11%, whereas new listings are down by 9%.
House costs are rising quickest in essentially the most inexpensive areas, 2.8% greater in markets with common costs beneath £200,000 with static costs in markets over £500,000.
In addition, it discovered that home costs are rising by over 4% in 5 postal areas together with Kirkcaldy, Motherwell and Tweeddale in Scotland, Oldham in the North West and Llandrindod Wells in Wales.
Prices proceed to register annual falls of 1% throughout southern England led by second dwelling hotspots equivalent to Bournemouth, Truro, Exeter and Torquay, alongside elements of central London.
It says that council tax modifications for second owners are seeing extra houses listed on the market in areas which have a excessive focus of second houses which is impacting home price inflation.
Zoopla government director Richard Donnell says: “The housing market has skilled a sustained enhance in market exercise over the past 18 months as mortgage charges have stabilised. The market is on monitor for essentially the most gross sales since 2022, however with out fast home price inflation.”
“Pre Budget hypothesis over attainable tax change is an everyday incidence however this summer season it has been greater than common which has led some patrons and sellers to delay dwelling shifting selections for houses priced over £500,000. The wider market stays largely unaffected.”
“Serious patrons ought to assume twice earlier than delaying as whereas the Budget is 2 months away it takes, on common, six to seven months to discover a property and full a sale.”
Meanwhile, Propertymark chief government Nathan Emerson feedback: “A slowing in home price growth can be welcome information for these critical about shifting dwelling, particularly first-time patrons. However, there are underlying elements affecting affordability and confidence, equivalent to financial uncertainty and inflation, making folks cautious about their funds, and stagnating revenue and wage growth.”
“Recent modifications to Stamp Duty throughout England and Northern Ireland have additionally lowered purchaser affordability, and rumours of additional alterations are sure to create some uncertainty.”
“For some, nonetheless, particularly present owners, a slow tapering in rates of interest has allowed lenders to introduce extra aggressive mortgage merchandise and has decreased the month-to-month price for these with variable or tracker mortgages, permitting them to refinance to decrease charges.”
“We now look to the Bank of England’s subsequent rate of interest announcement in November and hope to see constructive introductions by the UK Government’s Budget that can assist ease affordability pressures for patrons wanting to step onto or transfer up and down the housing ladder.”
Also, Finova enterprise improvement director Hamza Behzad provides: “Today’s knowledge could replicate a slight fall in total growth, however the market itself continues to be in a robust place. A trio of successive base charge cuts have led to lenders pricing in future cuts, decreasing mortgage charges and boosting competitors.”
“Another issue is The Renter’s Rights Bill – as rental yields decline, many landlords could select to promote up, including new inventory to an oversubscribed market and decreasing costs in sort.”
“However, mortgage charges are nonetheless greater than the pre-pandemic market, stretching already strained family budgets. As a consequence, many cautious patrons are holding again in anticipation of potential tax or reduction modifications.”
“All eyes at the moment are on the upcoming Autumn Budget, which is tipped to embrace a big shake-up of Stamp Duty guidelines. Now is the time for lenders and brokers to give attention to providing tailor-made options that help patrons and enhance monetary inclusion.”
“Innovative merchandise – equivalent to offset mortgages and joint possession – and extra tailor-made pricing could present a pathway for beforehand underserved teams to take their first step onto the property ladder.”
Former RICS resident chairman Jeremy Leaf states: “Yet one other housing market survey hot-on-the-heels of others not too long ago confirming property costs are softening.”
“In our places of work, we’re listening to repeatedly how considerations about attainable tax will increase in the Budget – significantly for high-end houses – are prompting patrons and sellers to ‘sit on their palms’, although our present gross sales are actually not collapsing.”
“Demand stays comparatively wholesome for extra inexpensive houses however is slowing in elements of the market which had been already below performing.”
