House value progress slowed in October on Budget rumours, official figures verify

House prices fell in the month of October as rumours of tax hikes in the Budget put people off moving, according to official figures released today.

Average prices went down by 0.1 per cent compared to the previous month, Office for National Statistics data shows, meaning the typical British home was worth £270,000. 

Year-on-year, prices went up by 1.7 per cent or £5,000 – down from the 2 per cent growth seen in the 12 months to September.

Slowing house price growth is being driven by falls in London. Prices in the capital fell by 1.9 per cent in just one month, meaning that the typical home in the capital is now £547,468, 2.4 per cent below what it was a year ago.

Prices also fell 0.6 per cent in the South West of England and in Scotland, while the West Midlands and Yorkshire and The Humber also recorded price falls.

Much of this is being put down to uncertainty in the run up to November’s Budget in which numerous property taxes were rumoured. 

Jonathan Handford, managing director at Fine & Country estate agents, said: ‘One factor that undoubtedly weighed on activity in October is the uncertainty surrounding the Autumn Budget.

‘When households are unsure how future tax rules may affect them, they are more likely to pause and wait for clarity before making major decisions.’

Some parts of the country continued to see price rises, however.  

Prices in the North East jumped 1.3 per cent on average during October, and has seen growth of 5 per cent over the past year. Meanwhile, prices in Wales went up 1.1 per cent in the month.

Prices could rise in the new year 

Jonathan Hopper, a buying agent at Garrington Property Finders, says that house prices may start to rise again in the New Year.

‘Since the Budget, buyer sentiment has recovered well and the market could rebound strongly at the start of 2026,’ he says. 

While the price of houses is trending upwards, however, it’s a very different story for flats.

The average price of a flat has fallen to £192,892, according to the data, which is 2.6 per cent lower than it was a year ago.

In London, where apartments make up much of the housing stock, the average flat has fallen by 5.1 per cent, from £450,756 to £427,689. 

In contrast to flats, the average semi-detached house in the UK has risen in value by 4 per cent year-on-year from £265,132 to £275,656. 

Jason Tebb, president of property website OnTheMarket said: ‘The average UK house price conceals significant regional differences, with London values in particular recording a sharp contraction. 

‘This is likely down to increased supply, low buyer demand and stretched affordability in London and the south east where values are significantly higher than elsewhere in the country and buyers are constrained by higher mortgage rates than in the past, as well as higher living costs.’

Looking ahead, a higher supply of flats on the market may put some downward pressure on prices in the short term.

However, it is widely expected that the Bank of England will cut interest rates tomorrow from 4 per cent to 3.75 per cent.

The expectation is that interest rates will continue on a downward trajectory next year. This could feed through into lower mortgage rates.

Estate agent Jonathan Handford added: ‘Higher borrowing costs earlier in the year have shaped buyer behaviour, and many households are taking more time to assess their long-term affordability.

‘However, mortgage rates have begun to ease compared with their peak, and we are already seeing that reflected in growing enquiries and increased footfall. 

‘With inflation falling today too, the likelihood of an interest rate cut has strengthened, which should give the market a welcome boost.

‘Looking ahead, greater policy clarity should help restore confidence. If borrowing costs continue to ease and inflation keeps creeping down, we expect the new year to bring sustainable, positive growth.’