Nationwide’s latest House Price Index shows that annual house price growth in the UK has slowed from 3.2% last month to 2.4%. However, in monthly terms, house prices increased by 0.1% between September and October this year.
These figures have been adjusted for seasonal factors. Without this adjustment, the average home was worth £356 less in October than in September, with the average house price falling from £266,094 to £265,738.
Before we dive into the details, check if your home’s value has changed. Use our instant online valuation tool for an updated estimate.
What is a House Price Index?
A House Price Index (HPI) tracks changes in property values. Different property portals, like Rightmove, and large mortgage lenders release their own HPIs. These reports show how property values have changed. HPIs are updated monthly and often include market predictions. Nationwide and Halifax are among the institutions that release these updates.
To compare the different HPIs, read our article on them.
What’s Happening in the Housing Market?
Housing market activity has remained strong recently, despite high interest rates. Mortgage approvals are approaching pre-pandemic levels. Solid income growth, low unemployment, and a strong labour market have kept demand steady and house prices rising since the start of the year.
Looking ahead, the economy should gradually strengthen. This will likely fuel further housing market growth. As interest rates drop and wages rise, affordability constraints will ease. This will support steady increases in both housing activity and prices.
How Will the Autumn Budget Impact the Housing Market?
The autumn budget confirmed the temporary increase in nil rate stamp duty thresholds will end on 31st March 2025. The nil rate threshold for first-time buyers will revert from £425,000 to £300,000 for homes under £500,000. For other buyers, it will drop from £250,000 to £125,000. These changes, though expected, will impact transaction timings. A surge in early 2025 is likely as buyers aim to complete before the new rates. Afterward, we expect a slowdown in the market, similar to previous stamp duty adjustments.
The impact will vary across regions. In the South East, first-time buyers will face the highest increase in moving costs—around £2,900. In regions like Yorkshire, the North, and Northern Ireland, the effect will be smaller. The new 5% stamp duty rate for additional properties, effective from 31st October, will add around £4,000 to buy-to-let costs. This will likely reduce activity in the buy-to-let market. These shifts, combined with high interest rates, will temper market growth temporarily until conditions stabilize.
What Do the Experts Say?
Mike Scott, Chief Analyst for Real Estate Agents in London, says:
“The Nationwide House Price Index for October shows a slight slowdown in price growth, but the average home still rose by 0.1% in the month and by 2.4% year-on-year. We expect steady growth for the rest of the year. However, prices are likely to rise faster in 2025 as mortgage interest rates fall.
The Budget measures are likely to slow earnings growth, as employers cut back on pay rises due to higher National Insurance contributions. This could moderate the faster house price growth we expect next year. The increased stamp duty on second home purchases is not expected to significantly affect house prices.