House price growth slowed annually but rose marginally on a monthly basis in the build-up to the Budget, Nationwide data shows.
The latest Nationwide House Price Index for November puts average house prices at £272,998, up 0.3% on a monthly basis from 0.2% in October.
Average annual price growth slowed from 2.4% to 1.8%.
‘Stable housing market’
Robert Gardner, chief economist for Nationwide, said: “The housing market has remained fairly stable in recent months, with house prices rising at a modest pace and the number of mortgages approved for house purchase maintained at similar levels to those prevailing before the pandemic.
“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all-time highs.”
Gardner suggested the changes to property taxes announced in the Budget are unlikely to have a significant impact on the housing market.
He said: “The high value council tax surcharge, which is not being introduced until April 2028, will apply to less than 1% of properties in England and around 3% in London.
“The increase in taxes on income from properties may dampen the supply of new rental properties coming onto the market. Rental supply has been constrained for some time, with the potential for this to maintain upward pressure on rental growth, which has been running at all-time highs in recent years.”
However, Gardner said housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect.
He said: “Borrowing costs are also likely to moderate a little further if the bank rate is lowered again in the coming quarters.
“This should support buyer demand, especially since household balance sheets are strong. Indeed, in aggregate, the ratio of household debt to disposable income is at its lowest for two decades.”
‘Cautious optimism’
Commenting on the index, Iain McKenzie, chief executive of The Guild of Property Professionals, said: “While annual house price growth softened slightly to 1.8% in November, the fact that prices still rose 0.3% month on month underlines the underlying stability we’ve seen throughout the second half of the year.
“One of the factors keeping price growth modest is the rise in the number of homes coming to market compared with last year. Buyers now have more choice than they’ve had in years, which is helping to keep price pressures in check and encouraging more realistic, grounded negotiations on both sides.
“Importantly, this data captures a period when many potential movers were holding their breath ahead of the Autumn Budget. With so much speculation around possible housing reforms, some paused plans temporarily. Now that the Budget has passed, buyers and sellers will be able to move forward with more clarity.
“Despite the uncertainty, the market held up well, supported in large part by needs-based movers, who tend to drive activity outside the prime price bands. Their continued presence is reflected in the latest transaction numbers, with seasonally adjusted sales rising 2% between September and October to reach their highest level since March.”
McKenzie said there is room for cautious optimism, adding: “Affordability should gradually improve as wage growth continues to outpace house price rises, and if inflation remains on its current trajectory, we may see the Bank of England begin reducing rates in the coming months, potentially as early as its next meeting. Any easing in borrowing costs would provide a welcome boost to both sentiment and activity as we head into the new year.
“Overall, the message from this latest data is clear: the market remains stable, active, and grounded, supported by solid fundamentals and a growing sense of confidence after a period of uncertainty.”
Source: Estate Agent Today
BU Homes, Solihulls Bu-tique Estate Agent
📞 Looking to Sell in Solihull?
Get in touch with our friendly Sales team today.
📍 Visit us at 130 Kineton Green Road, B927EF
📧 Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
📞 Call: 0121-778-4443
www.buhomes.co.uk
#BUHomes #JustListed #NewProperty #DreamHome #ForSale #LocalEstateAgen
