According to Halifax’s latest house price index, the typical house price increased by just £138 month-on-month, reaching a new record of £299,892. However, year-on-year growth slowed sharply, dipping to 0.7% in November, down from 1.9% in October. The latest figures reveal the clear impact of wider economic conditions, particularly the looming budget and persistent high-interest rates.
Caution Prevails Amid Budget Uncertainty
November’s stagnation in house prices was partly attributed to the uncertainty in the lead-up to the autumn budget. As the government’s fiscal policies remained unclear, buyers and sellers alike hesitated, waiting to understand what changes could impact the housing market. While speculation ran high about potential increases in property taxes, especially for high-value homes, the actual budget did not deliver any drastic shifts.
“Even with the changes to Stamp Duty back in spring and some uncertainty ahead of the Autumn Budget, property values have remained steady.” said Amanda Bryden, head of mortgages at Halifax. She noted that the slight rise in property values of £138 reflected the general stability of the market despite external economic pressures.
For homeowners, the slowdown in price growth might be disappointing, but for first-time buyers, the picture is more encouraging. Bryden explained that affordability had improved, making it easier for new buyers to enter the market. With mortgage costs accounting for a smaller share of income compared to previous years, first-time buyers have a better chance of securing a property despite higher interest rates.
Regional Variations: Northern Ireland Leads, London Struggles
While the national picture shows little movement, regional differences paint a more varied picture of the housing market. Northern Ireland, in particular, has outperformed other areas, with property prices climbing by 8.9% over the past year. The average home in Northern Ireland now costs £220,716, a significant increase compared to other parts of the UK.
In contrast, some regions of southern England are seeing declines in property values. London, for example, saw a 1.0% annual drop, with the average price now standing at £539,766. The South East and Eastern England also experienced small declines, with annual reductions of 0.3% and 0.1%, respectively.
Experts suggest these regional disparities are due to differences in affordability, with the south of England, particularly London, facing more significant challenges. As property prices remain high in these areas, buyers have been more cautious, particularly with the new “mansion tax” that will apply to homes worth over £2 million from 2028.
Although prices in London and other southern regions have struggled, the overall UK housing market remains resilient. According to Halifax, this stability comes despite some tough conditions, including rising interest rates and changes in tax policy.
Looking ahead, the outlook for the UK housing market remains mixed. While the immediate future may not see rapid price increases, analysts predict gradual growth in 2026, particularly as expectations of interest rate cuts continue to rise. The market’s stability, combined with improving affordability, could signal a more positive environment for buyers in the longer term.
Nonetheless, experts warn that regional differences will continue to shape the market, with northern areas expected to outperform the south in the short term. The steady pace of activity across most of the UK suggests that, despite a slowdown, the housing market remains a stable and resilient sector, even amid ongoing economic uncertainty.
