Halifax: UK house price growth hits new high for 2025 despite Autumn Budget tax fears

Homebuyers appear to have shaken off pre-Autumn Budget jitters as average UK house prices continue to hit record highs, but much of the growth is taking place in the north of the country.

Housing market activity may be under threat from tax rises in the chancellor’s Autumn Budget later this month but the latest Halifax House Price Index shows average UK house prices rose by 0.6% on a monthly basis in October, the highest monthly rise so far in 2025.

Annual house price growth also increased by 1.9%, from 1.3% in September, putting average UK property prices at £299,862, edging closer to the £300,000 mark.

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Amanda Bryden, head of mortgages at Halifax, said: “Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market, with the number of new mortgages being approved recently hitting its highest level so far this year.”

However, no-one lives in an average home and there can be price differences based on where you live and the type of property.

Plus, the market mood may change in the coming months with threats of tax rises in the Autumn Budget.

Property websites Rightmove and Zoopla have already reported falling demand from both buyers and sellers, particularly at the top-end of the housing market.

What's happening in the UK housing market?

The latest Halifax House Price Index shows Northern Ireland continues to post the strongest rate of annual property price inflation, with average values up 8.0% annually. The typical home now costs £219,646 in the country.

Scotland recorded annual price growth of 4.4% in October, up to an average of £216,051, while average prices in Wales rose 2% to £229,558.

The North East recorded the highest annual growth rate in England, with property prices rising by 4.1% to £180,924.

However, London and the South East saw prices fall slightly in October on an annual basis, by 0.3% and 0.1% respectively. The capital remains the most expensive part of the UK, with an average property now costing £542,273.

Bryden added: “There is no doubt that affordability remains a challenge for many. Average fixed mortgage rates are currently around 4% and likely to ease down further, but with property prices at record levels, moving home can feel like a stretch.

“Rising costs for everyday essentials are also squeezing disposable incomes, which affects how much people are willing or able to spend on a new property.

“Even so, while there has been some volatility, the market has proven resilient over recent months, as many buyers opt for smaller deposits and longer terms to help make the numbers work. With house prices rising more slowly than incomes for almost three years now, we expect the trend of gradually improving affordability to continue."

Guy Gittins, chief executive of Foxtons estate agent, said: “The latest Halifax figures show that, despite a degree of buyer hesitation in the lead-up to the Autumn Budget, the housing market continues to move forward, with prices recording another month of positive growth.

“This resilience reflects the depth of underlying demand, as well as some confidence from buyers following a period of greater stability in mortgage rates. With inflation holding firm, there is a very real prospect of a base rate cut before Christmas, which would further bolster affordability and positive sentiment amongst buyers.”

Will house prices rise in 2025?

House prices had a boost in the early part of 2025 as buyers rushed to beat changes in stamp duty thresholds at the end of March.

But demand has been dampened in recent months amid high inflation and concerns of tax rises in the Autumn Budget and rumours of stamp duty reform.

Fears of a mansion tax as well as already-higher tax rates in prime London have also driven many wealthy buyers away.

This has prompted analysts from brands such as Savills and Knight Frank to revise their house price forecasts.

Savills predicted this week that average property prices will grow by just 1% this year and by 2% in 2026, down from a previous prediction of 4% growth next year, due to current economic and tax concerns.

Tom Bill, head of UK residential research at Knight Frank, said: “Stable mortgage rates have supported demand in recent months and the bank rate is now on a downward path. But a tax-raising Budget will curb buying power and weigh on sentiment, keeping a lid on housing market activity next year.”

Beyond the fallout of the Autumn Budget, the direction of the market may depend on what the Bank of England does next with interest rates.

But Gittins added: “Regardless of what the Bank of England decides next month, we expect the UK property market to finish the year on a strong footing, as many buyers and sellers still push to complete before the end of 2025, or wish to head into 2026 with a renewed focus on their property goals.”