The latest Nationwide House Price Index shows that UK annual house price growth eased slightly in November, slowing to 1.8% from 2.4% in October. Despite the softer annual pace, prices continued to edge upward on a monthly basis, rising 0.3%. The seasonally adjusted monthly index increased to 545.9, up from 544.3 the previous month, while the average (non-seasonally adjusted) house price stood at £272,998. These figures suggest a modest but steady market as 2025 draws to a close.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“November saw a slight softening in the rate of annual house price growth to 1.8%, from 2.4% in October. However, prices increased by 0.3% month on month, after taking account of seasonal effects.
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.
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.
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. (The chart below shows the share of property transactions by value band, which is a good proxy for the housing stock.)
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 Bank Rate is lowered again in the coming quarters.
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.”
