Property costs in London and the South recorded their first fall in 18 months, pushed by Price range uncertainty and extra houses on the market.
Home costs have fallen throughout London (-0.1%), the South East (-0.1%) and the South West of England (-0.2%), Zoopla’s home worth index exhibits.
Purchaser demand has fallen by 12% year-on-year, whereas gross sales agreed fell by 4% amidst Price range uncertainty.
David Powell, chief government of Andrews property agent, stated: “After months of hypothesis, I’m disenchanted the federal government has missed this chance to deal with the challenges round stamp obligation and affordability.
“There will probably be a lot disappointment across the £2m+ mansion tax and it’s doubtless the South will get hit the toughest, we are going to eagerly await how this impacts the market and the unintended penalties that will observe.
“I think home worth progress within the South might stay static within the brief time period while the market adjusts to the brand new regular. I count on the market to bounce again from any injury attributable to leaked or shelved insurance policies main as much as the federal government’s Price range and we are going to see exercise ranges improve throughout the South all through 2026.”
UK home costs have elevated by 1.3% year-on-year to succeed in a median worth of £270,200.
Most areas and counties exterior the south of England are registering above common worth inflation, with house values within the North West of England 2.9% increased than a 12 months in the past.
The stamp obligation worth thresholds for present house homeowners had been set in 2014, whereas home costs are 47% increased over this time.
That is creating ‘fiscal drag’ for house consumers within the housing market with consumers of common priced houses paying extra
Since 2019, the variety of houses purchased by present owners the place the price of stamp obligation is greater than 2.5% of the acquisition worth has jumped from 21% to 33%.
The price of shopping for is rising for common house consumers in cities throughout the south of England and the case for the abolition of stamp obligation as a part of wider property reforms stays a powerful one – although the Chancellor determined to go away the tax alone within the Autumn Price range.
Richard Donnell, government director at Zoopla, stated: “The Price range bark was worse than the Price range chunk for the housing market. Residence consumers and sellers will welcome the tip of the uncertainty that has stalled housing market exercise because the late summer time. Our information exhibits the underlying demand to maneuver house stays robust. With better certainty we count on a rebound in housing market exercise that builds into the brand new 12 months with households who paused house shifting choices over latest months return with better confidence.
“The removing of the specter of a brand new annual property tax from 210,000 houses is especially constructive for the market and can assist revive exercise in higher-value areas throughout southern England the place home costs are beneath strain.”
Tom Invoice, head of UK residential analysis at Knight Frank, stated: “There may be extra certainty after the Price range, which ought to permit demand to bounce again following months of hypothesis.
“Nevertheless, there are nonetheless questions across the Mansion Tax. Till it’s launched in 2028, consumers and sellers face uncertainty round worth thresholds and even as soon as valuations are accomplished, they may very well be challenged, which might extend the limbo. Because the OBR has admitted, that would weigh on demand and transaction exercise. The opposite threat is the precedent of a brand new tax.
“Over time, extra properties will get dragged into the mansion tax internet, which implies the proportion of terraced homes, flats and semi-detached houses will develop, significantly within the capital. The time period ‘mansion tax’ may more and more really feel like a misnomer.”
