According to the Nationwide house price index, average house prices rose 0.3% from September to October, lower than the 0.5% month-on-month lift seen previously.
Robert Gardner, chief economist at Nationwide, said the housing market had remained “broadly stable” in recent months, with house prices rising modestly and mortgage approvals at similar levels to before the pandemic.
Gardner said: “Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all-time highs.
“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 bank rate is lowered again in the coming quarters.”
He added: “This should support buyer demand, especially since household balance sheets are strong – indeed, in aggregate, the ratio of household debt to disposable income is at its lowest for two decades.”
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Will house prices hold up?
Ryan Etchells, chief commercial officer at Together, said another rise in house prices could be “seen as a treat for sellers”, but there was a “question mark over whether it can be sustained”.
He said the base rate cut in August did not reignite buyer activity and uncertainty around the upcoming Budget was causing buyers to hold off.
Etchells added: “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.”
Jonathan Hopper, CEO of Garrington Property Finders, said: “At a national level, price growth has moved from a standstill to shuffling pace. This is as surprising as it is welcome.
“While it feels more like stagnation than a celebration, months of slowly rising or flat property prices have quietly dragged the property market to an important milestone.”
Hopper said the market was “far from back to normal” and pre-Budget jitters had a “chilling effect on sentiment” but many buyers had re-engaged in recent weeks.
“Fears over what the Budget might hold have not been good for the market, but they have generated pockets of activity and momentum among buyers who feel the current window of opportunity outweighs the risk,” Hopper added.
Babek Ismayil, CEO of OneDome, said the housing market was “holding steady but not thriving”.
Ismayil added: “While wage growth has helped ease some of the strain, it’s not translating into a sense of confidence among buyers. Household budgets remain under pressure from higher living costs, and the uncertainty surrounding the upcoming Budget is adding to the caution.
“What we’re really seeing is a market in pause mode. There’s resilience, certainly, but not momentum. The stability in house prices and transaction volumes shows that demand hasn’t collapsed, yet neither side – buyers or sellers – is feeling particularly bold. For now, steady rather than spectacular progress looks the most realistic outlook for the months ahead.”
