Buyer interest in homes priced above £500,000 has started to cool in recent weeks, according to the latest update from Zoopla. The property portal revealed that enquiries for these homes have fallen compared with this time last year, showing a shift in demand at the higher end of the housing market.
Zoopla’s figures show that demand for properties above half a million pounds is down by 4%. Alongside this, the number of new listings in this price bracket has also declined, falling 7% against the same period a year earlier.
For properties priced at £1 million or more, the picture is even more subdued. Buyer demand for these premium homes has dropped by 11% in the five weeks to 21 September, with new listings also down by 9% over the same timeframe.
The contrast with the wider market is clear. While the high-value end is slowing, most other areas of the property market remain stable, with demand and supply levels holding steady. This highlights a divide between the prime property sector and the more affordable market segments.
One reason for this cooling demand is that house prices are rising faster in lower-value markets, leaving more expensive homes lagging behind. Properties priced above £500,000 have largely seen “static prices”, suggesting that affordability issues are keeping growth subdued.
Some buyers are also delaying decisions due to uncertainty over potential policy changes. With the November Budget approaching, speculation about possible tax adjustments has created a “wait and see” approach, particularly among those looking at more expensive homes.
In addition, affordability constraints and higher stamp duty costs are acting as a drag in regions such as London, the South East, the South West and eastern England. These factors are contributing to slower house price growth in areas where property values are already high.
Despite these challenges, the overall level of sales being agreed across the UK has actually been rising. Many buyers are eager to take advantage of opportunities in the autumn housing market, which traditionally sees a seasonal boost in activity.
At present, one in three homes for sale is priced above £500,000, with around 8% valued at more than £1 million. This shows that higher-value homes still represent a significant share of the market, even though demand is softening in this bracket.
Looking at the national picture, annual house price inflation stood at 1.4% in August. However, the figures vary considerably by region. In areas with average house prices under £200,000, growth was more than double that figure, at 2.8%.
Southern England continues to record the weakest performance, with prices barely moving. Growth was under 0.5% in London, the South East, the South West and eastern England. By contrast, Northern Ireland saw the strongest rise in house prices, with growth reaching nearly 8%.
In the North West, prices increased by just over 3%, while some local markets outperformed even further. For example, Kirkcaldy, Oldham, Tweeddale, Motherwell and Llandrindod Wells all recorded house price growth of more than 4% over the year.
Not all areas have seen gains. Prices have continued to fall by over 1% in parts of southern England, particularly in Bournemouth, Truro, Exeter and Torquay, as well as certain parts of central London. This regional divide underlines the uneven nature of the housing market.
Richard Donnell, executive director at Zoopla, noted that the housing market has experienced rising levels of activity over the last 18 months as mortgage rates have stabilised. He explained that sales in 2024 are on course to be the highest since 2022, though without a return to rapid price inflation.
Donnell added that speculation ahead of the Budget is weighing on confidence at the higher end of the market. However, he reminded buyers that the average property purchase takes six to seven months to complete, so delaying decisions may not necessarily be beneficial in the long run.
Kevin Shaw, national sales managing director at Leaders Romans Group, also shared his perspective. He said the market has shifted in favour of buyers, with sellers more willing to negotiate and to align their asking prices with agents’ valuations. This balance is proving positive for many, particularly first-time buyers.
Shaw also pointed out that while uncertainty over potential property tax changes may slow parts of the market in the short term, the fundamentals remain stable. He suggested that confidence is likely to return once government policy becomes clearer, with a stronger spring market expected in 2025.
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