UK House Price Growth Slows as Buyers ‘Sit on the Sidelines’ Ahead of Budget
The UK property market showed signs of moderation in October, with house price growth slowing as potential buyers adopt a cautious stance ahead of the upcoming government budget, which may introduce new property taxes.
According to Nationwide Building Society, the average UK house price rose by 0.3% month-on-month in October to £272,226, slightly down from 0.5% in September. On an annual basis, price growth edged up to 2.4%, compared with 2.2% in the previous year.
The data suggests that while the market remains broadly resilient, high-end properties are experiencing slower sales. Analysts attribute this to buyers “sitting on the sidelines” as they await clarity on the UK Budget 2025, expected on 26 November, which may introduce taxes on homes valued over £500,000.
“If the housing market is one thing, it is resilient,” said Anthony Codling, housebuilding analyst at RBC Capital Markets. “House prices are near all-time highs, yet mortgage rates remain more than double pre-COVID levels. Buyers are taking a cautious approach, waiting to see what the budget brings.”
Property listing platform Rightmove noted a continuing flow of homes entering the market but observed that the usual “autumn bounce” in asking prices did not materialize this year. In West London, Amy Reynolds, head of sales at Antony Roberts, described the market as “sluggish, particularly at the higher end,” highlighting regional disparities in buyer activity.
Economic conditions have offered a mixed backdrop. While borrowing costs remain elevated compared with five years ago, the Bank of England’s August interest rate cut, with another expected imminently, has provided modest support to housing activity. Nationwide’s Chief Economist Robert Gardner emphasized the market’s stability:
“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, the housing market has held up well. Mortgage approvals and house price trends indicate broad resilience, even with historically high borrowing costs.”
Looking forward, Nationwide expects modest improvements in housing affordability if income growth continues to outpace house price increases and borrowing costs ease further. Analysts suggest that prospective buyers could benefit from more favourable financing conditions, while sellers may need to adapt to a more cautious market environment in the coming months.
Despite the slowdown, experts maintain that the UK property market is demonstrating long-term resilience. The interplay between high buyer demand, interest rate adjustments, and potential budget measures will shape the market dynamics as the year draws to a close.
