UK house price growth slows; market in ‘wait-and-see’ mode ahead of the budget

A new tax on the sale of properties over £500,000 is just one of the measures being considered by the Treasury, and in times of uncertainty, it is not unusual for markets to metaphorically sit on their collective hands; conversely, lower interest rates have helped to support activity, with a further cut expected to borrowing costs at the Bank of England’s Monetary Policy Committee meeting on Thursday.

Experts respond:

Commenting on latest Nationwide house price data showing a 0.3% increase despite ‘wait-and-see’ mode, Daniel Austin, CEO and co-founder at ASK Partners, said: “Today’s modest rise in property prices offers a welcome hint of optimism, but the market remains in ‘wait-and-see’ mode ahead of the Autumn Statement. The Bank of England’s decision to hold rates brings some reassurance, yet persistently high borrowing costs and ongoing policy uncertainty continue to weigh on both buyers and developers. Fixed mortgage rates remain elevated, delaying meaningful relief for homeowners and first-time buyers.

“Developers, meanwhile, are grappling with rising build costs, tighter debt markets, and planning delays, factors that render many projects financially unviable despite recent government moves to cut affordable housing requirements and streamline planning. These are positive steps, but without broader demand-side measures, such as stamp duty reform, first-time buyer support, and incentives for off-plan purchases, momentum is likely to remain subdued.

“Investors are focusing on long-term fundamentals. Resilient segments such as build-to-rent, co-living, and storage continue to attract capital thanks to a persistent supply-demand imbalance, even as overall market activity cools. Against a backdrop of global volatility and shifting domestic policy, UK real estate debt remains a compelling proposition, offering capital preservation, steady income, and protection from equity market swings.”

Nationwide HPI: “question of whether this growth is set to last remains in doubt”

Tanya Elmaz, managing director of intermediary sales at Together said: “A return in positive house price growth is a welcome sign following a few quiet summer months. The question of whether this growth is set to last, however, remains in doubt.

“While the Bank of England made a base rate cut in August, further rate cuts in the near future may be few and far between should inflation remain elevated. Whilst we at Together have just lowered rates on many of our products, the industry will need to see a bigger shift before rates are dropped widely and fixed-term borrowing becomes more attractive for consumers.

“The property industry also remains in the dark over potential changes in the tax regime at the Autumn Statement.  While rumoured tax changes, such as a potential property tax on houses worth over £500,000, will significantly affect the market, the uncertainty over what’s to come may keep activity subdued until more clarity is provided in the Budget.

“Despite these challenges, there remain many opportunities for aspiring homebuyers and landlords looking to invest. Those keen to seize an opportunity and move forward with their property plans can consider the wide range of financial products available, like Shared Ownership mortgages specialist buy-to-let mortgages, or bridging loans for fast, flexible finance.”

Nationwide HPI: “rise in house price growth could be seen as treat for sellers”

Ryan Etchells, chief commercial officer at Together said: “Another rise in house price growth could be seen as treat for sellers, albeit with a question mark over whether it can be sustained.

“The Bank of England’s August rate cut failed to reignite buyer activity and UK inflation remains the highest in the G7, keeping mortgage rates elevated and delaying further cuts. Uncertainty around the upcoming Budget – particularly the potential for a national property tax – is also causing buyers to hold off.

“The newly enacted Renters’ Rights Bill, while strengthening tenant protections, introduces new costs and legal hurdles for landlords, including the end of Section 21 evictions and tighter rent controls. Whilst this may prompt more landlords to exit the buy-to-let market and increase the number of homes for sale, many renters still lack the means to buy, so demand may not keep pace with rising supply.

“The industry is already feeling the effects. It is usual to expect a market slowdown around Christmas, however Zoopla have already recorded a drop in buyers and house sales compared to last year, signalling the festive dip has started early.  If landlord sell-offs continue, house prices could soften, especially in areas with a large number of private rentals. Still, subdued prices and falling buy-to-let rates offer opportunities for those ready to act, making it a good time to explore financial options with a mortgage professional.”