Labour’s hesitation over the Autumn Budget is already having a noticeable impact on the higher end of the housing market. Buyers and sellers are growing increasingly cautious, with fresh data showing that uncertainty is stalling activity in key property segments.
While the Government continues to speak about the importance of stimulating economic growth, recent figures from Zoopla highlight how speculation around possible property tax reforms is putting pressure on confidence. Instead of pushing forward with purchases, many buyers are choosing to wait until the Chancellor sets out clear plans.
Property expert Kirstie Allsopp went as far as to warn that the market feels “dead”, pointing to the standstill that speculation has caused. For many, the risk of committing large sums of money when tax rules could soon change has been enough to delay transactions.
Zoopla’s data shows that demand for homes priced at £500,000 or more has dropped by 4 per cent compared with the same period last year. This is a clear sign that households are hesitant to invest in properties that could f s ll into the scope of new taxation measures.
The picture looks even bleaker for homes valued above £1 million. Demand for properties in this category has fallen by 11 per cent in the past five weeks, when measured against the same point a year ago. This illustrates the depth of concern among wealthier buyers.
Separate research by Savills also points to weakness at the very top of the market. Prices in prime central London have slipped by 1.8 per cent over the last three months, the sharpest decline since 2016. Year-on-year, these properties are now down by nearly 5 per cent.
The market for country homes at the higher end has been hit even harder. Annual price falls of over 8 per cent have been recorded, suggesting that prime rural properties are no longer insulated from the pressures facing London and the South East.
Industry experts say the main problem is uncertainty. Riz Malik of R3 Wealth told the Daily Mail that buyers are unwilling to move until Chancellor Rachel Reeves presents the Autumn Budget. Rumours of mansion taxes or the replacement of stamp duty with a new property levy have been enough to put many off.
As a result, the south of England, where average house prices are generally higher, is experiencing a slowdown in inflation. According to Zoopla, this is the area most directly affected by speculation about upcoming tax reforms.
Not only is demand falling, but the number of homes being listed for sale has also dropped. Compared with last year, there are now 7 per cent fewer properties worth more than £500,000 available, and 9 per cent fewer homes valued above £1 million. Sellers are clearly hesitating as much as buyers.
Reports last month suggested that ministers were reviewing different options for property taxation. Ideas included replacing stamp duty with an annual property tax for homes over £500,000, introducing capital gains taxes on sales above £1.5 million, or reassessing council tax bands. Even though none of these plans have been confirmed, the speculation alone has been enough to disrupt the market.
London conveyancers have already reported buyers withdrawing from high-value purchases, blaming the uncertainty as their reason for pulling out. Sellers, too, are holding back, unwilling to cut prices or take risks ahead of November’s announcement.
Entrepreneur and landlord Kundan Bhaduri described the market as paralysed. He argued that prospective buyers do not want to risk investing significant sums until the Budget is clear, while vendors prefer to wait rather than accept lower offers. This has created a standstill in prime property transactions.
Some agents, however, note that the uncertainty is benefiting certain groups. Kevin Shaw of LRG explained that the balance has shifted in favour of buyers, as more sellers are willing to negotiate on price. This is particularly helpful for first-time buyers who are less affected by high-end tax speculation and are benefiting from lower interest rates.
Zoopla’s latest House Price Index adds further context. It shows that overall property price growth has slowed to 1.4 per cent, down from 1.9 per cent at the end of 2024. The average home in the UK now costs around £271,000, with the fastest growth recorded in more affordable areas such as Northern Ireland, where prices jumped nearly 8 per cent last month.
By contrast, expensive regions such as London, the South East, and the East of England are struggling, with price growth of less than 0.5 per cent. High stamp duty costs and stretched affordability are weighing heavily on these markets.
Zoopla also reported that mortgage affordability has improved slightly, with households now able to borrow 20 per cent more than they could six months ago for the same income. This has encouraged demand in lower-value markets, even as the prime segment remains subdued.
The Office for National Statistics also found that house prices rose by 2.8 per cent in the year to July, taking the average cost of a UK home to £270,000. However, this represents a slowdown compared with earlier in the year, when growth was stronger.
Rob Mansfield, a financial adviser, suggested that affordability may have reached its limits. He warned that with Budget speculation creating even more doubt, the housing market could face a quieter winter than usual. For many households, the uncertainty is proving to be as damaging as the potential tax changes themselves.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property