UK house prices rose last month despite uncertainty ahead of the budget, according to Nationwide, which predicted the newly announced “mansion tax” would have a limited impact on the housing market.
Britain’s largest building society said the average house price rose 0.3% month on month in November, more than the 0.1% rise expected by economists polled by Reuters. The average price of a house was £272,998, up from £272,226 in October.
Last week, Chancellor Rachel Reeves announced a new high-value council tax surcharge on homes worth £2m or more in England from April 2028.
There will be four price bands, with the surcharge starting at £2,500 a year for properties worth more than £2m and rising to £7,500 for properties worth more than £5m.
“The changes to property taxes announced in the Budget are unlikely to have a significant impact on the housing market,” said Robert Gardner, chief economist at Nationwide. “The higher value council tax surcharge… will apply to less than 1% of properties in England and around 3% of properties in London.”
While the rate of annual house price growth slowed significantly to 1.8%, the slowest rate since last June, economists had expected a 1.4% rise. The annual growth rate in October was 2.4%.
“Against a backdrop of low consumer confidence and signs of weakness in the labor market, this performance suggests resilience,” Gardner said. “The housing market has been fairly stable in recent months and house prices have been rising at a modest pace.”
Low interest rates have helped support activity. The Bank of England last cut borrowing costs in August, but last month it was decided to keep interest rates at 4% in a close vote by the bank’s monetary policy committee.
However, the bank said inflation was already likely to peak at 3.8%, down from its previous estimate of a peak of 4%, clearing the way for further cuts.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Although the market has calmed down a bit as some have taken a ‘wait and see’ approach, lenders remain keen to lend where the money is available to do so.
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“With talk of another cut in the base rate this month, borrowers may be tempted to hold on in hopes of cheaper rates to come, but those concerned about budgets and rate hikes may want to consider a cheaper rate several months in advance of when they need it.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, said buyers were waiting to see what was in the budget.
He said: “There is a good chance that 2026 will bring more positivity. We often see bullishness in January, and despite the challenges, some things are working in the market’s favour. The wealth tax brought in in the budget will impact only a small part of the market.”
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