Zoopla’s House Price Index: September 2025
.Adapted from Zoopla’s Report by Richard Donnell, Executive Director – Research 29 September 2025
Pre-Budget speculation over possible tax changes is impacting market activity for homes over £500,000. The rest of the mainstream housing market is carrying on, largely unaffected.
Key takeaways
House price inflation running at 1.4% to August 2025
Pre-Budget tax speculation hits activity for higher-value homes – demand down 11% for homes priced at £1m+ and fewer new listings over £500,000
· Stronger price inflation in more affordable areas - up to +2.8%
· Mortgage rates stable at 4-5%, supporting demand but unlikely to fall in the near term
· North/south divide in price inflation and activity widens - weaker southern England and stronger rest of UK
· Market activity is set to plateau in the coming weeks, but serious buyers and sellers shouldn’t put decisions on hold
Average UK house prices: last 3 months
The average house price in the UK is £271,000 as of August 2025 (published September 2025). This is a rise of 1.4% or £3,870 over the past year.
Budget uncertainty is starting to impact home buyers
UK homebuyers have returned to the market in strength over the past two years, driving a steady recovery in housing sales. The average estate agent now has 36 homes for sale, which is 20% more than in 2023 and 8% higher than at this point last year. Sales are also rising as determined buyers look to secure homes this autumn.
Recently, though, speculation about possible tax changes has started to affect activity. Our data shows both buyer demand and new listings for homes priced above £500,000 are down compared with a year ago, as some buyers pause to see what the Autumn Budget may bring.
The uncertainty began in August, when the media reported on several policy papers. These included ideas such as scrapping stamp duty and replacing it with an annual property tax on homes worth over £500,000, a council tax revaluation, and even capital gains tax on sales above £1.5m. None of these proposals came directly from the government, but they were described as “options ministers are considering”, which has been enough to unsettle parts of the market.
Property tax speculation hits demand and new listings
Right now, one in three homes for sale is priced above £500,000, and 8% are over £1m. But over the past five weeks, buyer demand for £1m+ homes has dropped 11% compared with the same time last year, while demand for properties over £500,000 is down 4%.
UK house price inflation is running at 1.4%
UK house price growth has been slowing in recent months. In August, average prices were 1.4% higher than a year ago, compared with 1.9% growth in December 2024. Over the past year, the average UK home has gained £4,350 in value, bringing the average price to £271,000.
Higher stamp duty costs since April, combined with affordability pressures, are holding back growth in the south. For buyers in other regions, however, these challenges are proving less of a barrier.
Market is resilient in more affordable areas
There’s a clear pattern between local house prices and growth: the lower the average value of homes, the stronger the price increases.
Markets with average prices below £200,000 are seeing the fastest growth, up 2.8% on average. By contrast, in areas where homes average more than £500,000, prices are barely moving.
Mortgage rates are stable between 4% and 5%
Greater stability in mortgage rates has helped drive the recovery in housing market activity, following the sharp rise in average rates through 2022 and 2023.
At present, average rates for new 5-year fixed deals sit between 4% and 5%, depending on the size of the loan. Earlier this year, many expected base rates to fall more quickly, which would have pushed mortgage rates lower, but that hasn’t happened.
Even so, buyers are finding it easier to borrow. Thanks to changes in lender affordability rules, homebuyers can now borrow around 20% more than they could six months ago, at the same mortgage rate and on the same income. This shift has boosted demand in recent months, particularly among first-time buyers and in more affordable housing markets.
What’s next in the UK housing market?
Housing activity has been on the rise for the past 18 months, but this momentum is likely to level off in the coming weeks as uncertainty around the Autumn Budget affects buyer confidence. Speculation around tax changes is nothing new, but this year the rumours have been more prominent, and the market is already showing signs of a reaction.
Demand and new listings for higher-value homes are weaker, driven partly by hopes of saving on stamp duty and partly by concerns over possible new taxes. By contrast, activity in the wider market is holding steady compared with last year, with the strongest price growth in more affordable areas – underlining the north–south divide.
With the Budget just two months away, it’s worth remembering that moving home typically takes six to seven months from offer to completion. For serious buyers, waiting for certainty could mean missing out on opportunities in the meantime.
Download the House Price Index - September 2025 (PDF, 300KB)
If you would like to discuss any issues in this report, or if you are thinking about moving, remortgaging or reviewing your protection requirements, please get in touch with Phil Clark.
How to Contact Us for Advice
Phil Clark will personally deal with your enquiry
Tel 0117 325 1511
Email info@swmortgages.com
Complete a form via our website www.bristolmortgagesonline.com
Please remember: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
