What’s happening with UK house prices? Latest property market moves and forecasts

The immediate prospects for house price growth seem uncertain in the aftermath of the Autumn Budget.

The chancellor’s latest fiscal update did little to boost the housing market, instead introducing higher taxes on property income and a new mansion tax.

House price indices have shown a slowdown in growth in the build-up to the Budget and more recent data in the aftermath from the Royal Institution of Chartered Surveyors (RICS) suggests the market’s prospects remain unclear.

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The latest RICS UK Residential Market Survey, compiled both before and after the Budget last month, revealed the weakest reading for buyer demand since late 2023.

This has been blamed on Budget uncertainty, a lack of housing market support and high borrowing costs.

It comes as the latest Halifax House Price Index shows house price growth was flat across the UK on a monthly basis and slowed annually from 1.9% in October to 0.7% in November – the weakest reading since March 2024.

In London prices fell by 1%, the South East by 0.3% and Eastern England by 0.1%.

This echoes the latest Nationwide House Price Index, which showed annual price growth slowed from 2.4% to 1.8% between October and November 2025.

The slowdown has been attributed to the uncertainty caused by the build-up to the Autumn Budget on 26 November, which introduced a new mansion tax charge for homes worth £2 million and above as well as higher property income tax charges for landlords.

Chancellor Rachel Reeves announced in her Autumn Budget that the property basic rate of tax will rise from 20% to 22% from April 2027. For higher rate taxpayers, it will increase from 40% to 42%, and from 45% to 47% for additional-rate taxpayers.

New forecasts from the Office for Budget Responsibility (OBR) suggest this could have an impact on the property market and house price growth.

The OBR said it expects the increase to property income tax rates from April 2027 to reduce house price growth by around 0.1 percentage points a year from 2028.

The average house price in the UK is expected to rise from £260,000 in 2024, to just under £305,000 in 2030, according to the OBR.

The latest data from the Office for National Statistics (ONS) House Price Index also shows speculation about property tax changes has already had an impact on the property market.

Average property values fell by 0.6% between August and September, the first drop since April 2025, according to the ONS. Annual price growth was 2.6%, which is down from 3.1% in August, putting average prices at £271,531.

There are hopes that with the uncertainty of the Autumn Budget out of the way and expectations of interest rate cuts now that inflation is slowing, house prices could be set for a boost in 2026.

What do official house price figures show?

There are at least five different indices that measure how much UK house prices have gone up or down over the past month and year, but the most authoritative source is HM Land Registry.

The Land Registry has the most comprehensive data set, as it includes cash purchases as well as those financed through a mortgage, but the main drawback is that it is published with a six-week time lag. This means other sources can give a better snapshot of current conditions.

The latest official figures from the Office for National Statistics (ONS) show house prices in the UK fell by 0.6% between August and September, the latest month for which data is available.

The ONS records the average price of a UK house at around £271,531.

In contrast, Halifax and Nationwide’s house price indices report different average house prices as they can only use data from their own customers’ transactions and therefore report different figures.

Consumer confidence remains low

Housebuyers in the UK were at their least confident this financial year in the lead-up to the Budget, according to latest data, as murmurings of tax hikes spooked buyers across the market.

On top of a weakening labour market and slow economic growth, the latest sentiment survey from the RICS revealed new buyer enquiries fell 32% in November, the weakest reading since November 2023, while agreed sales and new instructions are also negative.

This is particularly the case for the upper end of the property market. Data from Zoopla shows house prices in London and the South recorded their first fall in 18 months at the start of November, driven by Budget uncertainty and more homes for sale, boosting choice for home buyers.

UK-wide buyer demand dropped 12% annually, whilst sales agreed fell 4%.

There are hopes that a recovery could be on the way, now that Budget uncertainty has been removed.

Richard Donnell, executive director at Zoopla, said: “The Budget bark was worse than the Budget bite for the housing market. Home buyers and sellers will welcome the end of the uncertainty that has stalled housing market activity since the late summer. Our data shows the underlying demand to move home remains strong.

“With greater certainty we expect a rebound in housing market activity that builds into the new year with households who paused home moving decisions over recent months return with greater confidence.”

Where are house prices forecast to go in the short-term?

Asking prices are a useful barometer for market sentiment as it currently stands. These snapshots tend to be published only a few weeks after the data was recorded.

The latest data from Rightmove shows asking prices fell by 1.8% between October and November 2025, a larger drop than usual. Average asking prices are also down by 0.5% annually.

The drawback is that asking prices don’t necessarily reflect the final sold price.

RICS members aren’t expecting house prices to grow over the next three months until borrowing costs come down but with interest rate cuts on the horizon, there are higher hopes over the next 12 month period.

Will house prices rise in 2026 and beyond?

Despite trimming their forecasts, some experts expect house price growth to pick up in 2026 and beyond.

Estate agency Hamptons expects that house prices will grow modestly in 2026, anticipating a rise of 2.5% by Q4 2026.

This growth is forecast to be driven mostly by a healthier market in the North of England and Midlands; the latter is expected to overtake London in price performance.

Better affordability in these two regions is a major factor for growth where fewer buyers are priced out of the market.

Wider economic factors play a part too – the estate agency is expecting three interest rate cuts by the Bank of England in 2026, lower inflation, and for wages to rise faster than prices. The combined factors could see affordability improve over the year.

However, a less optimistic near-term picture has been painted by real estate services firm Savills, which expects house price growth to be more sluggish, predicting prices to increase by just 2% in 2026.

There is a light at the end of the tunnel, though. Savills forecasts growth to pick up between 2027 and 2030, bringing total growth from 2025 to 2030 to 22.2%.

This growth is expected to be powered by strong performance in Yorkshire and The Humber and North East England, which are both forecast to grow 28.8% by 2030.

Savills is currently forecasting 4% growth in 2027, 6% in both 2028 and 2029, and 5.5% in 2030

They agree with Hamptons that the outlook for affordability is one factor that will drive the speeding up of price growth. They expect wages to grow 22% between 2025 and 2029 and for the economy to strengthen closer to 2030, boosting buyer confidence.

Savills added that falling mortgage rates and more relaxed affordability tests from lenders could boost transaction volumes, making it easier for first-time buyers to get onto the housing ladder.

Following encouragement from policymakers, some lenders are allowing mortgage customers to borrow more than they could previously, with Nationwide saying it may mean applicants could borrow £28,000 more on average.

Tom Bill, head of UK residential research at Knight Frank, said: “Both main UK indices show how pre-Budget uncertainty pushed house price growth close to zero. Clarity has now returned, but an array of tax rises, which include an income tax threshold freeze, will increasingly squeeze demand and prices. Offsetting that is the fact that mortgage rates are expected to drift lower next year as the base rate bottoms out at around 3.25%.”