House costs see ‘modest’ rise of two.5% previously 12 months to succeed in £271,000 regardless of pre-Budget fears
- Prices climbed 2.5% annually as Budget fears subsided
Average house prices climbed in November after a small fall in October, official figures show.
Prices grew 0.3 per cent in November to £271,000 – a £1,000 monthly rise – according to data from the Office for National Statistics (ONS).
The average price ticked 2.5 per cent higher in the 12 months to November – the latest available data from the ONS shows – in welcome news to owners.
The property market stuttered after April, amid growing fears over housing policy in Rachel Reeves’s second Budget and stamp duty costs rising for buyers.
A plummet in consumer confidence saw many buyers sitting on the sidelines as they awaited news of tax changes on November 26, which caused prices to stall.
Many buyers put off their moving plans last year amid stamp duty hikes and Budget uncertainty
Plus, affordability pressures remained amid sticky inflation. This was no doubt compounded by a change to stamp duty thresholds in April that saw buyers scramble to find thousands of extra pounds for their purchase.
October saw a small 0.1 per cent monthly fall in prices as demand dampened but now they have risen once more in November, although one expert warns it is a ‘modest’ rise.
Paresh Raja, chief executive of specialist lender Market Financial Solutions, says: ‘The market suffered in October and November from all the turbulence building up to the Autumn Budget. This data reaffirms the growth slowdown.’
Nick Leeming, chairman of estate agency Jackson-Stops, says: ‘November’s modest house price growth points to a market in a holding pattern towards the end of 2025, rather than one gaining momentum.’
In the year to November, average homes in England rose 2.2 per cent to £293,000, 0.7 per cent in Wales to £209,000 and some 4.5 per cent in Scotland to £193,000.
Not all regions saw growth in prices. London was the only English area which saw a fall (1.2 per cent) in the 12 months to November.
Mr Leeming adds: ‘Once the Chancellor set out her fiscal plans, much-needed clarity helped to steady confidence after a prolonged period of uncertainty.
‘While it was not a catalyst for immediate change, certainty matters, and that reassurance is now beginning to filter through to buyer behaviour, setting the market up for a stronger-than-usual start to the new year.’
Agents and brokers expected phones to be ringing off the hook in this New Year as buyers who had been sitting on the sidelines are lured back to the market.
Buyer fears over policy have now been quelled and many are anticipating a cut to interest rate, which has sparked confidence.
Experts expect two further Bank of England base rate cuts this year which will provide a boost for many borrowers who are remortgaging.
Darrell Walker, of CHL Mortgages for Intermediaries, says: ‘We’ve already seen the market moving past the usual festive slowdown, and the general feeling is that momentum is building.
‘With forecasts of further Bank of England rate cuts and lower borrowing costs, we’re expecting demand to rise in the coming weeks.’
Fixed-mortgage rates – which are priced on market outlook and factor in expected interest rate cuts – have already plummeted from the highs seen just a couple of years ago.
A fierce rate war at the end of last year saw borrowing costs drop and many lenders have slashed rates again in the new year.
The average two-year fixed rate deal currently sits at 4.77 per cent, says rate scrutineer MoneyfactsCompare, down from its peak of 6.86 per cent in July 2023. For a five-year deal, the average is 4.87 per cent, down from a high of 6.51 per cent in October, 2022.
Plus, improved affordability for first-time buyers is luring many to begin house hunting.
One in three 18-to 34-year-olds are planning on buying a new or first home this year, more than double the national average of 16 per cent, according to data from Barclays.
And confidence in the housing market has soared among the age group from 33 per cent in January 2025, to 40 per cent by the end of the year.
Many banks hiked their lending powers last year so a young buyer can borrow more money, a move that has bolstered buyer confidence.
And borrowing costs for those buying a starter home have improved.
In the last few days, a handful of lenders have launched 10 per cent deposit deals with rates as low as 3.96 per cent.
It means monthly payments on low-deposit loans – typically the highest on the market – are becoming more affordable.
Meanwhile, Nationwide has loosened affordability rules, meaning new and existing customers to borrow six times their annual earnings, up from 5.5 times previously.
