UK house prices rose last month despite uncertainty before the budget, according to Nationwide, which predicted that the newly announced “mansion tax” would have a limited impact on the housing market.
The UK’s biggest building society said the average house price rose 0.3% month on month in November, higher than a 0.1% increase predicted by economists polled by Reuters. The average price of a home was £272,998, up from £272,226 in October.
Last week the chancellor, Rachel Reeves, announced a new high-value council tax surcharge in England on homes worth £2m or more from April 2028.
There will be four price bands, with the surcharge starting at £2,500 a year for properties valued at more than £2m and rising to £7,500 for properties worth more than £5m.
Robert Gardner, the chief economist at Nationwide, said: “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 … will apply to less than 1% of properties in England and around 3% in London.”
While the rate of annual house price growth slowed significantly to 1.8%, the slowest rate since last June, economists had expected only a 1.4% rise. In October, the annual rate of growth was 2.4%.
“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience,” Gardner said. “The housing market has remained fairly stable in recent months with house prices rising at a modest pace.”
Lower interest rates have helped to support activity. The Bank of England last lowered borrowing costs in August, and last month it decided to keep interest rates at 4% in a close-run vote by the Bank’s monetary policy committee. However, the Bank said inflation was already likely to have peaked at 3.8%, below its previous prediction of a peak of 4%, paving the way for further cuts.
Mark Harris, the chief executive of the mortgage broker SPF Private Clients, said: “While the market has been a little quieter as some adopted a ‘wait and see’ approach, lenders have remained keen to lend, with funds available to do so.
“With talk of another base rate reduction this month, borrowers may be tempted to hold on in the hope of cheaper rates to come but those concerned about budgeting and rate rises might wish to consider locking into a cheaper rate now several months ahead of when they might need it.”
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said buyers had waited to see what was in the budget.
She said: “There’s a decent chance that 2026 will usher in more positivity. We often see a boost in January, and despite challenges there are a few things working in the market’s favour. The budget brought a property tax that will only affect a small slice of the market.”
