The UK housing market has entered a two-speed phase, with southern England seeing small house price declines while more affordable regions continue to rise. The slowdown, driven largely by tax speculation ahead of November’s Budget, temporarily weakened demand – yet early signals suggest confidence is now returning. For landlords, the picture is nuanced: price pressure in high-value regions may create buying opportunities, while strengthening transactions elsewhere signals resilience.
UK house prices respond to Budget tax rumours
Zoopla’s latest House Price Index suggests uncertainty around a potential new property tax on homes over £500,000 led to a 12 per cent drop in buyer demand in the four weeks to 23 November. London and the South East recorded house price falls of 0.1 per cent year-on-year, while the South West slipped 0.2 per cent – marking the first downward movement in 18 months.
Meanwhile, the wider UK market continued to grow, with average values up 1.3 per cent to £270,200. The North West posted the strongest annual rise at 2.9 per cent, reinforcing a continuing trend: lower-cost regions are outperforming areas where affordability and stamp duty burdens are tighter.
Affordability and taxation remain the key themes. Stamp duty rates, last updated meaningfully for most buyers in 2014, have failed to track a 47 per cent rise in property values since. This fiscal lag now means one in three homebuyers pays stamp duty exceeding 2.5 per cent of the purchase price – up from just 21 per cent in 2019.
For landlords already fatigued by recent policy shifts, the scrapping of proposals for a new annual tax on higher-value homes marks a significant reprieve. Zoopla estimates 210,000 homes currently listed above £500,000 would have fallen into this tax band.
Richard Donnell, Executive Director at Zoopla, commented:
“The Budget bark was worse than the Budget bite. The removal of the threat of a new annual property tax… will help revive activity in higher-value areas across southern England where house prices are under pressure.”
Property transaction activity sees subtle recovery
HMRC transaction figures indicate early signs of momentum building back into the market. Seasonally adjusted residential sales rose 2 per cent month-on-month to 98,450 in October – the highest level since March 2025. The non-seasonally adjusted measure rose 13 per cent from September.
Non-residential activity is also stabilising, rising 4 per cent month-on-month after steep declines from last year’s Budget-driven peak.
Nathan Emerson, CEO of Propertymark, said:
“On the lead-up to any Budget there’s hesitation. But with lower base rates than only twelve months back, it is positive to see forward momentum… particularly in non-seasonally adjusted figures.”
Yet Emerson also criticised the lack of targeted support for first-time buyers and downsizers – policies that could have stimulated churn and unlocked larger family homes.
Outlook for landlords and regional opportunities
Letting agents report that high-value southern markets are now pricing more competitively, with some sellers dropping expectations by £10,000-£25,000 to secure faster sales – a potential opening for landlords expanding portfolios where yields were previously out of reach.
Meanwhile, regional growth markets continue to deliver stronger rental returns. In parts of Greater Manchester and West Yorkshire, investors report gross yields above 7 per cent on mid-tier family homes – significantly outperforming the Southeast’s typical 3-4 per cent bracket.
Stamp duty reform continues to be flagged as a necessary lever for improving mobility, lowering acquisition costs, and encouraging landlords to reinvest. Without reform, friction remains – particularly for portfolio landlords purchasing multiple properties.
Editor’s view
Buyer hesitation is easing now the Budget dust has settled – and the absence of new punitive taxation measures gives landlords space to think longer term. But the uneven geography of house price growth means strategy matters more than ever. If stamp duty reform emerges in 2026, expect renewed activity and steeper competition in high-value areas. Until then, selective purchasing in resilient northern and Midlands markets remains a compelling route for yield-focused investors.
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance.
Published: 28 November 2025
Sources: Zoopla House Price Index, HMRC Transactions Data, Propertymark
Related reading: House prices drop 1.8% as tax speculation delays high-value buyers
