House prices across southern England have begun to fall for the first time in 18 months due to speculation over the Autumn Budget, creating opportunities for buyers.
The latest data from online property platform Zoopla shows that while house prices continue to rise steadily across the rest of the country, the market in southern England has cooled significantly.
House prices in London, the South East and the South West all recorded year-on-year house price declines of 0.1% or 0.2%, despite continued growth across the rest of the country.
Zoopla’s data shows that the number of homes for sale in southern regions of England is now 8-15% higher than it was a year ago, which it said is creating a clear buyer’s market.
The average price of a house in the UK is 1.3% higher than a year ago, slightly below the 1.7% annual growth recorded last year.
Buyer demand has also dropped by 12% annually and sales agreed are 4% lower than last year, signalling an early slowdown for the property market this year.
Zoopla attributed the price drop in southern England partly to speculation over a potential annual property tax on homes valued at more than £500,000, which accounts for a significant proportion of homes in the region.
Now that the government has announced its ‘mansion tax’ will apply only to homes valued at over £2 million, Zoopla said confidence should begin to rebuild. It expects that following the last four months of slower activity, the market will gain fresh momentum in early 2026.
Another factor affecting the housing market is the continued costs of stamp duty, which can make households less inclined to move and influence the price buyers are prepared to pay.
Zoopla said that over 90% of buyers across southern England and the Midlands pay stamp duty, and a third of buyers now pay more than 2.5% of their purchase price in stamp duty due to frozen thresholds.
Despite stamp duty remaining in place and the imposition of a surcharge on properties valued at more than £2 million, Zoopla said the Budget has provided clarity and stability that could lead to market growth in the coming months.
“After months of anticipation, the Budget has proved gentler on the housing market than many expected. Buyers and sellers alike will welcome the clarity it brings, drawing a line under the uncertainty that has held back activity since late summer,” Zoopla said.
“Our data shows that the underlying motivation to move home remains firm. With clearer direction now in place, we expect activity to pick up steadily as we head into the new year, with many households who delayed decisions returning to the market with renewed confidence.”
It added that the current gap in price inflation between the South and the rest of the UK is likely to continue, noting that sustained income growth will be essential in improving affordability for buyers.
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