Nationwide’s latest House Price Index (HPI) shows that UK house prices continued their steady climb in October, with annual growth edging up to 2.4% and values rising 0.3% month-on-month.
These data highlight ongoing resilience in the housing market despite subdued consumer confidence and higher borrowing costs. Alongside the figures, when it comes to home renovations that add value, Nationwide’s research reveals that kitchen and bathroom upgrades remain the most popular home improvements, while extensions and loft conversions adding a bedroom can lift property values by up to 24%.
Commenting on the latest HPI figures, Robert Gardner, Nationwide’s Chief Economist, said:
“October saw a slight rise in the rate of annual house price growth to 2.4%, from 2.2% in September. Prices increased by 0.3% month on month, after taking account of seasonal effects.
“The housing market has remained broadly 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 struck.
“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.
“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.
What are the most popular home renovations?
Accompanying these data, Nationwide also released research results to throw some light on what property owners can do to up the value of their homes.
Gardners said: “Our recent research1 found that kitchen and bathrooms renovations were the most popular amongst homeowners who have made improvements to their home in the last five years, with 71% undertaking either, or both, of these.
“More than two in five (42%) added a bathroom or an ensuite, whilst 25% added an additional toilet.
“Of those undertaking work, around a third (34%) made green improvements to their property, with over half of these (56%) adding solar panels. As we explored in our recent special report on the housing stock, solar panels are becoming an increasingly popular feature, with nearly 1.5 million dwellings in England having photovoltaic (PV) panels, equating to nearly 6% of total dwellings (up from less than 3% in 2013).
“Younger homeowners appear to be most interested in greening their homes, with over two thirds (69%) of those aged 25 to 34 who had renovated in the last five years making green improvements. Older homeowners (those aged 55 or above) were least likely to have made green improvements (just 18%), with bathroom renovation being the most popular amongst this demographic (68% of those who had made improvements opted for this).
“The most popular reason for renovating was to make the property look nicer (54%), while 35% were looking to boost the value of their property, with the latter being the most important factor for younger homeowners. 32% of those surveyed made improvements to modernise the property to make it habitable, while 26% were looking to add more space. Interestingly, just 7% were renovating in preparation for a sale.
What adds the most value?
“We’ve used our house price data to look at the factors that affect the values of homes as well as the potential to add value2. While we can’t identify the value associated with kitchen and bathroom renovations, we are able to explore the impact of more substantial projects, particularly those which increase the size of the property.
“Location remains key to house values, but other factors, such as the number of bedrooms, are also important to homebuyers. Home improvements that increase the size of the property, such as an extension or loft conversion, remain a compelling way to add value.
“Having more useable space is generally thought to be consistent with better quality accommodation and people are prepared to pay for it. A 10% increase in floor space, all things equal, adds 5% to the price of a typical house. But our analysis suggests that it is additional bedrooms that are key to adding value. For example, adding space to create an additional double bedroom can add 13% to the value of an existing two-bedroom house3.
“Homeowners that add a loft conversion or extension, incorporating a large double bedroom and bathroom, can add as much as 24% to the value of a three-bedroom, one-bathroom house4.”
Sharing his reaction to these latest Nationwide data, Nathan Emerson, CEO at Propertymark, comments:
“As the year continues to unfold, we have seen challenges and achievements in almost equal measure. It is positive for those on the housing ladder to see them accumulate more equity. However, the flip side is that it remains ever more demanding for first-time buyers to attain a foothold on their housing journey.
“Three base rate dips have helped increase consumer affordability; however, we still have a rate of inflation that is near double what the Bank of England is hoping for. We have seen Stamp Duty threshold changes disrupting sales trends for those in England and Northern Ireland earlier this year, and we now have the Autumn Budget just around the corner which may influence the smooth flow of property transactions, with many people holding out to see what changes may potentially be announced.”
Jonathan Handford, Managing Director at Fine & Country, comments: “Another month of healthy growth shows that there is gentle momentum in the market, supported by easing affordability pressures and more balanced mortgage costs.
“Buyers remain active but are operating with more choice and greater negotiation power than during the peak years. That means sellers who are flexible and responsive will continue to stand out.
“Traditionally, this is a time of heightened market activity, as buyers look to sign on the dotted line and complete before the festivities begin.
“Presentation is key. With healthy stock levels creating more competition among sellers, a property that feels warm, welcoming and well cared for will always capture attention. If a buyer comes in from the cold to a clean, cosy home, that’s when they start to fall in love.
“This slight uplift suggests that buyers and sellers alike are carrying an optimistic outlook into 2026, provided they remain guided by market realism.
“The Autumn Budget next month is an opportunity for the Government to offer further reassurance to the market. Clarity and predictability would be welcome; a well-signalled package could help rebuild confidence, whereas major surprises or new tax burdens risk prolonging the current wait-and-see mindset among some buyers.”
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: “These latest data showing a 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.”
Notes>
- The research was conducted by Censuswide, among a sample of 2,000 homeowners (of which 1,285 have undertaken home renovations over the last five years) (18+). The data was collected between 06.10.2025 – 07.10.2025. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.
- The methodology correlates the price paid for a property against the set of property characteristics (including the property type, age, number of bathrooms, number of bedrooms and floor area), region and locality (ACORN). The data was drawn from Nationwide’s sample for the period October 2024 to September 2025.
- Additional bedroom is assumed to have a floor area of 13m2.
We assume an additional 28m2 of floor area, which includes a large bedroom and bathroom.
