UK Housing Market Stalls as Budget Worries Slow Buyer Activity

The pace of house price growth in the UK has decelerated to its lowest level in eighteen months, as speculation around potential stamp duty reforms and looming tax changes in the autumn budget weighs heavily on the property market. According to figures from Halifax, one of the largest mortgage lenders, house prices dipped by 0.3 per cent in September, following a modest rise of 0.5 per cent in August. Analysts had expected a slight increase last month, underlining the unexpected chill settling over the market.

The typical UK home now commands a price of £298,184, with annual house price inflation slowing to just 1.3 per cent. This marks the sluggish annual growth since April 2024 and stands in stark contrast to the 5 per cent rise seen twelve months ago. Since the beginning of 2025, prices have inched up by a mere 0.3 per cent.

Economists indicate that ongoing concerns about employment and persistent mortgage rate pressures are dampening buyer sentiment. The prospect of tax increases in the forthcoming budget, set for November, is prompting many would-be buyers and sellers to delay decisions. Reports suggest the Chancellor is considering sweeping changes that could see the replacement of stamp duty and council tax with an annual property levy, fuelling further uncertainty and hesitation in the market.

Regional disparities remain apparent. Northern Ireland posted a robust 6.5 per cent rise in house prices over the past year, followed by Scotland at 4.5 per cent. England’s north-east recorded a respectable annual increase of 4.8 per cent, while the south-east and London both saw price gains of less than 1 per cent. In contrast, the south-west experienced a 0.2 per cent drop. These figures highlight a broader trend of stronger growth in the north compared to the south of England.

Notably, data from Nationwide diverged somewhat, showing an annual inflation rate of 2.2 per cent after price growth in September. However, most other indicators point toward a market losing momentum. Property transaction levels and mortgage approvals slipped in August, while estate agent surveys indicate falling buyer enquiries, sales, and prices. Industry experts cite the uncertainty around property tax reform as a major factor contributing to these subdued figures.

Autumn traditionally sees increased house-hunting activity, yet this year the market appears to be treading water as participants await clarity from the Chancellor’s budget. Mortgage rates, although lower than in recent years, have not dropped as quickly as many hoped. With affordability continuing to be a major hurdle, some analysts now predict house prices could end 2025 at near flat levels, with lingering fiscal concerns casting a shadow over the outlook for 2026.