House prices rise at slowest rate in years as Budget ‘fails to boost market’
House prices rose at their slowest rate since the start of 2024 in October, as property experts said the Budget failed to boost the UK’s beleaguered housing market. The average house price in the UK rose by 0.5 per cent this month to £273,566, according to Nationwide, slowed from 0.8 per cent growth last month [...]
In October, the UK house prices experienced their slowest rate of increase since the beginning of 2024, according to property experts. The average house price rose by only 0.5 per cent to £273,566, as reported by Nationwide. This growth rate was down from 0.8 per cent in the previous month and 1.6 per cent in August.
Several factors, such as surging mortgage rates resulting from the Iran war, rising building costs, and burdensome red tape, have negatively impacted the UK housing market. Property experts at Nationwide attributed this slowdown to expectations of interest rate hikes by the Bank of England, which are causing mortgage costs to rise and deterring prospective buyers from making decisions.
The UK experienced a 4 per cent decrease in housing transactions in September, with 94,000 transactions recorded, according to HMRC. This decline further indicates the declining pace of the property market.
Tom Bill, head of UK residential research at Knight Frank, stated that the Budget proved to be of little consequence, as it failed to provide sufficient support to address the challenges faced by the housing market. Healey's Budget announcement did not include any measures that would effectively tackle the housing market issues.
Estate agents and property experts have criticized the Chancellor, John Healey, for proposing a 2 per cent tax hike on rental income, which they believe will increase rents and decrease the availability of rental properties. Although housebuilders applauded the Chancellor's introduction of a new equity loan scheme to help first-time buyers, they criticized the government for excluding London homes valued over £650,000 from the relief.
The Bank of England is expected to raise interest rates, which could put more pressure on the housing market as mortgage costs increase. Analysts predict that the market may face further softness in the coming months, with property demand potentially being tested for resilient housebuilders.
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