UK Housing Market Slows Amid Property Tax Uncertainty
The UK housing market is showing signs of slowing as buyers and sellers adopt a cautious “wait and see” approach ahead of potential property tax changes in the next budget. Speculation that the government may increase taxes on high-value properties has created uncertainty, particularly across London, the South East, and other higher-priced markets.
According to Rightmove, both buyer enquiries and new listings fell by 5% in September 2025 compared to the same month last year. While the market remains resilient, the typical post-summer bounce in activity failed to materialise. Experts attribute this slowdown to growing uncertainty over capital gains tax, council tax bands, and potential taxes on homes over £500,000.
The Numbers Behind the Market Slowdown
According to Rightmove, the average property price for new listings was £371,422 in October 2025, a 0.3% rise (£1,165) year-on-year.
According to Knight Frank, this is below the 10-year average October increase of 1.1%, signalling slower growth than typical seasonal trends.
According to market analysts, buyers in southern England are pausing, while markets in the Midlands and North are showing relative resilience for high-yield investors.
Experts note that while mortgage rates remain stable and prices have softened slightly, demand is weakening for the second successive year, largely due to speculation over tax policy changes.
Why Property Tax Speculation Is Affecting Buyers and Investors
Several government proposals are contributing to market caution:
New taxes on high-value homes – Potential levies on homes over £500,000 and the removal of capital gains tax exemptions on primary residences above £1.5 million.
Changes to council tax bands – Introduction of additional bands for expensive properties could increase ongoing ownership costs.
Investor uncertainty – Buy-to-let and other investors are pausing purchases until clarity on tax and regulatory frameworks emerges.
The combination of these factors is prompting first-time buyers, homeowners, and property investors to delay purchases, impacting transaction volumes, fall-through rates, and overall market confidence.
Opportunities Despite a Slower Market
While national confidence wavers, opportunities remain for informed buyers and investors:
Regional value: According to market reports, Northern England, the Midlands, and smaller urban centres continue to offer strong rental yields and more affordable purchase prices.
Strategic purchasing: Buyers prepared to move quickly can secure properties below market value due to cautious sellers.
Data-led investment: Understanding local market trends, pricing dynamics, and potential tax implications is now essential to maximise returns.
At Property Like A Pro, we help clients navigate this cautious market by combining data-driven insights, regional intelligence, and investment strategy — ensuring both first-time buyers and seasoned investors can make informed decisions.
Final Thoughts
The 2025 UK housing market slowdown demonstrates the impact of property tax uncertainty on buyer and seller behaviour. While high-value markets pause, opportunities persist for those who act strategically and understand local trends.
If you want to move with confidence despite shifting regulations, market caution, and potential tax changes, contact us. We help clients invest with clarity, strategy, and confidence — turning uncertainty into opportunity.