Annual house price growth slowed in November – Nationwide Building Society

Annual house price growth softened to reach 1.8% in November, from 2.4% in October, according to an index.

Across the UK, house prices increased by 0.3% month on month on average in November, taking the typical property value to £272,998, Nationwide Building Society said.

Robert Gardner, Nationwide’s chief economist, 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.

“The changes to property taxes announced in the Budget are unlikely to have a significant impact on the housing market. 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.”

Mr Gardner added: “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.

“Looking forward, housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect. Borrowing costs are also likely to moderate a little further if (the Bank of England base rate) is lowered again in the coming quarters.

“This should support buyer demand, especially since household balance sheets are strong.”

In the Budget, the Government announced a high-value council tax surcharge in England on homes above £2 million from April 2028.

There will be four price bands with the surcharge starting at £2,500-a-year for properties worth more than £2 million and rising to £7,500 for properties worth more than £5 million.

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Alice Haine, a personal finance analyst at Bestinvest by Evelyn Partners, said: “While property tax changes may dampen demand at the upper end of the market, and higher taxation could accelerate buy-to-let exits, there could be a resurgence in wider market activity.

“Buyers who paused moving plans in the run-up to the Budget, in a bid to assess the impact of any new measures, may now make a return, with some estate agents pinning their hopes on a ‘Boxing Day bounce’ if prospective purchasers wait until after the Christmas festivities to resume house hunting.”

Sarah Coles, head of personal finance at Hargreaves Lansdown, said buyers waited to see what was in the Budget.

She said: “There’s a decent chance that 2026 will usher in more positivity.

“We often see a boost in January, and despite challenges, there are a few things working in the market’s favour. The Budget brought a property tax that will only affect a small slice of the market.

“Meanwhile, the fact that wages continue to rise ahead of both inflation and house prices is helping boost affordability. Mortgages rates are also falling, which is opening up new opportunities for buyers. The interest rate cut expected in December should power more mortgage rate cuts, which in turn should bring buyers back.”

Tom Bill, head of UK residential research at Knight Frank, said: “Like many other parts of the economy, buyers sat on their hands until there was more clarity.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “While the market has been a little quieter as some adopted a ‘wait-and-see’ approach, lenders have remained keen to lend, with funds available to do so.

“Falling swap rates, which underpin the pricing of fixed-rate mortgages, have given added impetus to reduce rates and drum up business at a time when there has been less of it around.”

Nathan Emerson, chief executive officer of property professionals’ body Propertymark, said: “A slight uplift in house prices month on month is a positive sign given the crucial role that housing plays in driving the UK economy. A confident and active market supports wider economic growth, which is welcome at this point in the year.

“With inflation likely to ease in the coming months, consumer affordability should gradually improve. When the economic position allows, further reductions in interest rates will help revitalise mortgage lending and support a healthier market.”

Iain McKenzie, chief executive officer of The Guild of Property Professionals, said: “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.”