Annual house price growth across the UK weakened further in October, reaching its lowest level since January 2024, according to Nationwide. Prices were only marginally higher than a year ago, while monthly growth remained unchanged after seasonal adjustments.
Nationwide’s latest house price index recorded annual growth of just 0.5%, down from 0.8% in September. The average property price before seasonal adjustments stood at £273,566, compared with £274,251 the previous month.
Mortgage Costs Continue to Put Pressure on Buyers
Robert Gardner, Nationwide’s chief economist, said both housing market activity and house price growth had lost momentum in recent months, partly due to ongoing economic uncertainty.
He highlighted continuing geopolitical tensions, particularly the conflict in the Middle East, which has pushed energy prices higher and increased concerns about inflation.
These pressures have also strengthened financial market expectations of potential Bank Rate rises, keeping the market interest rates that influence mortgage pricing elevated.
Mr Gardner suggested that house prices could face further downward pressure in the near term as demand from prospective buyers remains subdued.
Housing Affordability Continues to Improve
Despite the slowdown in the housing market, Mr Gardner noted that the wider economy has remained relatively resilient, with annual economic growth picking up over recent quarters.
He also pointed to stable employment levels and improving real incomes as positive signs for households.
Household debt, measured against disposable income, remains close to its lowest point in two decades. Although higher market interest rates have partly offset recent improvements in affordability, the overall position has improved over the past two years.
This is largely because household incomes have grown considerably faster than house prices.
Property Industry Responds to Nationwide Figures
Tom Bill, head of UK residential research at Knight Frank, said the latest figures showed a housing market struggling to gain momentum. With the main house price indices close to zero growth and mortgage approvals almost 20% lower than a year ago, he believes the impact of the Middle East conflict is becoming increasingly clear.
He added that rising mortgage costs are having a greater effect on the market than the support measures announced in the Budget. However, the lack of any major surprises from the Chancellor could provide a small boost in the coming months. Sellers will still need to set realistic asking prices to reflect the financial pressures facing buyers.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, also highlighted the impact of higher mortgage rates and inflation. He said uncertainty surrounding the period before the Budget had further affected buyer and seller confidence.
However, he has noticed that some people who had put their property decisions on hold are beginning to reconsider their plans now that there is greater clarity about the immediate economic outlook. Activity is gradually returning, although buyers and sellers remain cautious.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said slower house price growth reflects the combined impact of higher mortgage rates and affordability pressures, which are limiting what buyers can afford or are willing to pay.
He welcomed the government’s new scheme to support first-time buyers, announced in the Budget, but pointed out that it will not be available until the spring. He also questioned whether the initiative alone would be enough to generate the increase in property transactions and market activity needed.
Nigel Bishop of Recoco Property Search said the market failed to experience its usual autumn boost this year. Buyer demand remained weak throughout October, leaving many sellers disappointed by the number of offers received.
As a result, some homeowners have had little choice but to reduce their asking prices to attract interest.
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