Speculation around property taxes ahead of the Budget contributed to a fall in home buyer demand and sales agreed in recent weeks, according to Zoopla. The website reported a 12% drop in buyer demand and fewer sales agreed in the four weeks to November 23, compared with last year.
House prices recorded an annual fall in London and southern England for the first time in 18 months, with London seeing a 0.1% decline, the South East 0.1%, and the South West 0.2%. However, prices continued to rise in more affordable areas, with the UK average increasing by 1.3% annually to £270,200.
The Budget, announced on Wednesday, introduced a high-value council tax surcharge in England on homes above £2 million from April 2028. The surcharge starts at £2,500 a year for properties worth over £2 million and rises to £7,500 for those over £5 million. The government estimates fewer than 1% of UK properties will be affected, raising over £400 million by 2029-30.
Zoopla noted that the absence of a proposed annual property tax on homes over £500,000 will be a “welcome relief” and could boost housing market activity at the start of 2026. Sellers in southern England, where higher concentrations of homes valued at half a million pounds or more exist, are expected to see the biggest boost.
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. With greater certainty we expect a rebound in housing market activity that builds into the new year.”
David Powell, CEO of Andrews estate agent, added: “I suspect house price growth in the South may remain static in the short-term whilst the market adjusts to the new normal. I expect the market to bounce back from any damage caused by leaked or shelved policies leading up to the Budget and we will see activity levels increase across the South throughout 2026.”
