House prices across the UK recorded another increase in September, according to data from Nationwide Building Society, even as speculation continues over possible property tax changes in the Chancellor’s upcoming Budget.
The monthly figures showed that the average house price climbed by 0.5 per cent in September. This was despite growing uncertainty in the market, with buyers and sellers carefully weighing rumours that property taxes could rise in the 26 November fiscal statement.
Discussions around potential changes to stamp duty, capital gains tax, and council tax have unsettled the market. Many people who had been preparing to move have now chosen to delay their plans until the Budget announcements are confirmed.
Nationwide revealed that the average UK home now costs 2.2 per cent more than it did a year earlier. This is a slight improvement on the 2.1 per cent year-on-year rise recorded in August, signalling steady growth in values despite the cloud of fiscal uncertainty.
Northern Ireland continues to lead the way when it comes to price growth. Properties there are now valued 9.6 per cent higher than they were 12 months ago, outpacing all other regions in the UK.
In Wales, house prices increased by 3 per cent compared with last year, while Scotland also saw a respectable annual rise of 2.9 per cent. These figures highlight how growth remains uneven across the different nations of the UK.
A clear divide is also emerging between northern and southern England. In the North, which includes areas such as Tyneside, Teesside, and Cumbria, prices rose by 5.1 per cent over the past year, according to Nationwide.
By contrast, the South of England is seeing much slower growth. Across regions including London, the South East, South West, and East Anglia, prices increased by just 0.7 per cent on average in the past 12 months.
Estate agents say this north-south gap is being driven by differences in demand and supply. In the South, more homes are coming onto the market, which gives buyers greater choice and allows them to negotiate harder on price.
Zoopla recently reported that speculation about tax changes has caused a 4 per cent fall in buyer enquiries for homes priced at £500,000 or more, compared with the same period last year. Wealthier buyers in particular appear to be holding off until the Chancellor reveals her plans.
Knight Frank has also highlighted the impact of this caution. The property firm recently revised its forecast for house price growth this year down from 3.5 per cent to just 1 per cent, pointing to a combination of weaker confidence and increased stock levels.
Tom Bill, head of UK residential research at Knight Frank, explained that the approaching Budget is adding to hesitancy in the market. While stable mortgage rates have encouraged activity in recent months, many buyers are unwilling to take risks until they know more about the government’s tax policy.
Not everyone is pessimistic, however. Robert Gardner, chief economist at Nationwide, believes there are still strong fundamentals supporting the housing market. He pointed to low unemployment, rising wages, healthy household finances, and the likelihood of lower borrowing costs if interest rates fall in the months ahead.
Analysts also stress that the balance between supply and demand remains the key driver of property prices. With more homes available in the South, buyers currently hold the upper hand, while in northern regions, limited supply is continuing to support stronger growth.
Buying agents say the market is becoming increasingly split between those who need to move and those who can afford to wait. Needs-based buyers are still progressing with purchases, but they are negotiating firmly to offset potential risks, while wealthier movers are choosing to delay decisions until the outcome of the Budget is clear.
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