UK Property Market Cools as Overpriced Homes Struggle to Sell

The UK property market is showing signs of cooling down, with new figures revealing that overpriced homes are being left behind as savvy buyers gain the upper hand.

According to property platform Zoopla, the average UK house price has risen just 1.3% year-on-year, reaching £270,600. While prices are still inching upwards, the pace is notably slower than the 2.1% growth seen earlier in the year. The trend is a reflection of what many are calling a "buyer’s market," where demand remains healthy but only for realistically priced homes.

What Kinds of Homes Are Selling & What Aren’t?

One of the key findings in the latest House Price Index is the growing gap between homes that are priced correctly and those that aren’t. Homes that require a price cut take, on average, 2.4 times longer to sell than those priced appropriately from the outset.

There’s plenty of interest from buyers. But buyers now have far more choice, especially in southern England, so sellers need to be realistic.

Experts warn that homes listed at overly ambitious prices risk staying on the market for months, or worse, not selling at all. Setting the right price is crucial. If sellers want a quick sale, understanding local market conditions is more important than ever.

UK Property Market Regional Divide: North vs South

The report highlights stark differences across the country. In northern regions like the North East and North West, lower housing supply and greater affordability have helped speed up sales and boost price growth.

In July, homes in the North took just 27 days on average to sell — 23% faster than the national average of 35 days. These regions also saw stronger price increases of 2.7% and 2.1% respectively.

Meanwhile, the picture looks quite different in the South East and South West, where homes are taking longer to sell — 39 days on average — and price growth has slowed to just 0.3%. In part, this slowdown is due to an oversupply of homes and higher overall asking prices.

Coastal Towns See Surge in Unsold Stock

The slowdown is being felt especially hard in coastal towns such as Truro, Exeter and Bournemouth, where a quarter of homes have been on the market for more than six months. A major factor behind this trend is an increase in second homes being put up for sale, driven by rising Council Tax rates.

Prices in these areas have dropped by between 1.1% and 1.4%, with sellers now being urged to adjust their expectations.

Other towns seeing large numbers of unsold homes include York, Torquay and Llandrindod Wells, where, once again, pricing strategy is proving crucial for those hoping to move by the end of 2025.

How Will This Impact Property Taxes?

Adding to the tension are growing concerns over potential property tax reforms. Rumours suggest the government may look to replace stamp duty with an annual property tax for homes worth over £500,000 and possibly introduce Capital Gains Tax on sales of main residences worth more than £1.5 million.

These proposals, although not yet confirmed, are already creating a ripple effect in areas such as London and the South East, where a third of homes on the market exceed the £500,000 threshold. Some buyers are opting to wait until after the Autumn Budget before making a move.

Supply Shrinks but Sales Hold Strong

Despite regional challenges and market uncertainties, sales activity remains solid, with a 5% increase in agreed sales compared to this time last year. Around 1.15 million property sales is expected in 2025, marking a 5% rise from 2024.

However, one issue facing buyers is a shrinking pool of new listings. While many buyers spent the summer reviewing finances and shortlisting homes, fewer new properties are coming onto the market.

There was a spike in landlords selling earlier this year due to the Renters Rights Bill, but that’s now eased. It may become harder for buyers to find homes within their budget, so starting the search early is key.

First-Time Buyers See Silver Lining

Still, not all the news is gloomy. For first-time buyers, slower price growth could be a welcome sign.

Stable house prices give buyers a chance to make their move without the fear of being priced out next month. But sellers must remain realistic. Listing a property at a fair price helps everyone and leads to quicker, smoother sales.

Conclusion

Forecasts suggest that house price growth will stay modest for the rest of the year, with inflation likely to stay between 1.5% and 2%. The message from the market is clear: homes that are priced right are still selling—and quickly.

For sellers hoping to move in 2025, understanding your local market and adjusting your price accordingly may be the difference between a fast sale and a long wait.