Annual house price growth across the UK decelerated in October, reaching 1.7 per cent, a dip from the 2.0 per cent recorded in September, according to official figures.
The Office for National Statistics (ONS) reported that the average property value nationwide stood at £270,000 last month.
Regionally, England saw average prices climb to £292,000, marking a 1.4 per cent annual increase. Wales experienced a 1.5 per cent rise, bringing its average to £211,000, while Scotland’s properties averaged £192,000 after a 3.3 per cent annual uplift.
In Northern Ireland, the third quarter of 2025 saw average house prices reach £193,000, representing a significant 7.1 per cent annual increase.
Within England, the North East had the highest annual house price inflation in October, at 5.0%. It was lowest in London, where the average house price fell by 2.4%. House prices also fell in the South West by 1.3% on average.
Amy Reynolds, head of sales at London-based estate agency Antony Roberts, said: “In London, where affordability and sentiment are highly rate-sensitive, even small shifts in expectations can have an outsized impact on activity.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “When house prices fall it affects wannabe downsizers who are relying on the equity in the home to supplement their retirement income. It also dents the confidence of homeowners, who feel less well off, and may hold back on spending as a result.
“Given how sluggish economic growth is right now, this could spell more bad news for the economy. The only people likely to be celebrating are those moving up the property ladder and first-time buyers.”
The figures were released as the ONS said the rate of Consumer Prices Index (CPI) inflation slowed to 3.2% in November, from 3.6% in October.
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It is the lowest CPI rate since March and a bigger slowdown in inflation than many economists had been expecting.
The Bank of England will announce its next base rate decision on Thursday.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said on Wednesday: “The likelihood of another quarter-point reduction in base rate at tomorrow’s meeting looks almost certain.
“Lenders have already provided borrowers with plenty of festive cheer by reducing their fixed-rate mortgages in anticipation of further base rate cuts and there is a growing range of sub-4% products available to tempt them. We expect this trend to continue into the new year, which is encouraging news for those looking to move or remortgage.”
Ian Futcher, a financial planner at wealth manager Quilter, said: “Today’s inflation figures show a marked fall compared to last month, and combined with last week’s disappointing GDP data, the Bank of England’s Monetary Policy Committee looks poised to cut rates.
“This would be welcome news for buyers, reinforcing confidence that mortgage rates will continue their gradual decline into the new year. Markets are already pricing in further cuts in 2026, which could bring more competitive deals to the market.”
David Hollingworth, associate director at L&C Mortgages, said: “Inflation remains higher than the Bank of England’s target, but this should be enough to signal a more sustainable path of easing.
“Stubborn inflation has held back the pace of rate cuts but while a December rate cut looked far from likely in the summer, it now looks like a cert.
“I’d expect to see that competition to continue in the new year, as lenders look to get off on the right foot.”
Nick Leeming, chairman of estate agency Jackson-Stops, said: “As we edge into the new year, it is important for sellers to continue to price competitively. This is a precision market, with regional nuances and supply dynamics varying widely between postcodes, putting emphasis on sellers to read it correctly.
“For buyers, it is likely the Bank of England will reduce interest rates this week and fuel competitive mortgage offers, giving some more leverage and impetus to make their move in January.
“This is the window buyers have been waiting for – choice, leverage and stability finally back on their side. Already in the first few weeks of December we have seen a sharp uptick in offers and exchanges, with a continued surge in activity expected in the first quarter of the year.”
The ONS also said average UK monthly private rents increased by 4.4% annually to reach £1,366 in November. The annual growth rate slowed from 5.0% in the 12 months to October.
Nathan Emerson, chief executive of property professionals’ body Propertymark, said an “unhealthy imbalance between rental supply and demand” contributes to rental prices edging upwards.
