Compared to October, average house prices were up by just 0.3%, the Nationwide House Price Index revealed.
An unshaken market
Robert Gardner, chief economist at Nationwide, said the housing market had been “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”.
Gardner added: “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.”
Karen Noye, mortgage expert at Quilter, said the figures reflected a market that was “treading water”, with most of the month dominated by rumours of what would be announced at the Budget.
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Noye said attention had returned to interest rates now that the Budget was out of the way, with markets predicting a base rate cut this month.
She added: “Even if the Bank of England holds off until the new year, expectations of lower rates have already fed into swaps and lenders have started to trim fixed rate mortgages. Any fall in borrowing costs is crucial for first-time buyers, who are still facing the toughest affordability conditions in years.
“Former owner-occupiers with more equity behind them are in a slightly stronger position, but this group also slowed activity during the Budget standstill. Confidence will depend heavily on how mortgage rates behave over the next few weeks.”
Noye said: “Overall, this is still a market that is stable but subdued. The removal of Budget uncertainty helps, but buyers will only return in greater numbers if mortgage rates continue to drift down. If inflation keeps falling and lenders sharpen pricing further, we could see activity pick up in the new year, but a rapid rebound is unlikely.”
Budget announcements won’t harm housing market
Gardner said the changes to property taxes announced in the Budget were “unlikely to have a significant impact on the housing market”.
He said the high-value council tax surcharge would only impact 1% of properties and acknowledged that the increase in property tax may dampen the supply of new rental properties coming to market.
However, Gardner said: “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 rate is lowered again in the coming quarters.
“This should support buyer demand, especially since household balance sheets are strong.”
Jeremy Leaf, North London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chair, agreed, saying the figures showed the market was “fairly stable”.
He added: “With the property measures in the Budget not proving to be as harmful as some of the kite flying beforehand had indicated, expectations of a modest rebound are stirring a little more activity. With an earlier base rate cut more likely as the Bank of England gets a better hold on inflation, this may help encourage buyers and sellers to return to the market in January with more purpose.”
Jonathan Hopper, CEO of Garrington Property Finders, said the data did not show the “uncorking of demand seen since the Budget”, adding that parts of the market had been enjoying a “flicker of warmth and a rapid thaw following months of slowing transaction numbers and flatlining or falling prices”.
He said the market was in “reset territory” and buyers who had paused plans were now continuing with them.
Hopper said: “Above all, there is a palpable sense of relief that the most punitive tax rises that the Chancellor was reportedly considering were left out of last week’s Budget.
“Many movers chose to put things on hold in the second half of 2025 and the shackles will come off in January. Property portals tend to see a surge in window shopping from prospective buyers on Boxing Day – this year, it may start before the Christmas turkey is even cold.”
