UK house price growth saw a slight decline in October, as new data from Nationwide Building Society suggests continued caution among buyers. Monthly growth eased to 0.3%, down from 0.5% in September, signalling that uncertainty around the upcoming Budget and a weakening jobs market are influencing buyer sentiment.
Despite the monthly slowdown, annual house price growth edged up to 2.4% in October, compared to 2.2% the previous month. This brought the average UK property value to £272,226. Nationwide described the market as “broadly stable,” noting that while activity remains steady, broader economic pressures are still holding some buyers back.
Experts believe that speculation about potential property tax changes is prompting many buyers to delay decisions until after the Budget. The uncertain economic outlook and signs of a cooling labour market are also contributing to a more cautious approach from home seekers.
Elliott Jordan-Doak, Senior UK Economist at Pantheon Macroeconomics, commented that while the housing market remains subdued, slow but steady growth is likely to continue in the months ahead. He noted that some homebuyers are adopting a “wait-and-see” attitude as they await clarity from the government’s fiscal plans.
Jordan-Doak added that despite these hesitations, housing demand appears more resilient than surveys have suggested. This, he said, could result in a pick-up in market activity once the Budget has been delivered and greater certainty returns.
Recent figures from the Bank of England supported this view, revealing that mortgage approvals climbed to a nine-month high in September. This rise came as borrowing costs eased slightly, helping to sustain buyer interest.
Robert Gardner, Chief Economist at Nationwide, said the market’s current performance reflects resilience, especially given the economic backdrop. He noted that house prices are holding steady while mortgage approvals remain at levels comparable to those seen before the pandemic.
Gardner highlighted that this stability is particularly impressive, considering that mortgage rates are still more than twice as high as before the pandemic and that property prices remain close to record levels.
Looking ahead, Gardner suggested that the housing market could see modest improvements in affordability if wage growth continues to outpace house price growth. He also pointed to the possibility of slightly lower borrowing costs if the Bank of England reduces interest rates in the coming months.
The central bank is set to make its next rate decision soon, and most economists expect the rate to hold at 4%. However, with inflation showing signs of easing, further cuts could be considered later in the year.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, said that the housing market has demonstrated remarkable resilience and may continue to do so through the winter. She noted that wage growth outstripping house prices, combined with a steady fall in mortgage rates over the past six months, has helped to sustain buyer confidence.
Coles added that better mortgage deals introduced recently should further encourage activity in the property market, especially as affordability gradually improves.
Meanwhile, HM Revenue & Customs data showed that seasonally adjusted residential property transactions rose by 1% between August and September, reaching 95,980. This figure also marked a 4% increase compared with the same period last year.
Nick Leeming, Chairman of Jackson-Stops, said the HMRC data indicates that while the housing market has slowed slightly in anticipation of the Budget, it remains fundamentally strong, supported by lifestyle-driven purchases.
Jason Tebb, President of OnTheMarket, echoed this optimism, stating that the market continues to move in a positive direction overall.
However, property platform Zoopla observed some cooling in higher-end sales, particularly for homes priced above £500,000, as uncertainty over potential tax reforms weighs on confidence. Leeming added that properties valued over £2 million are seeing similar caution from prospective buyers ahead of any potential policy changes.
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