Annual house price rises slowed again in November with annual growth of 1.8% last month, down from 2.4% in October, Nationwide reveals.
Despite the slowdown, it says the market continues to show signs of underlying resilience.
Prices edged up 0.3% on a monthly basis to reach £272,998, up from October’s £272,226.
Stable housing market
The lender’s chief economist, Robert Gardner, said: “The housing market has remained fairly stable in recent months, with house prices rising at a modest pace and the number of mortgages approved for house purchase maintained at similar levels to those prevailing before the pandemic.
“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all-time highs.”
He added: “The changes to property taxes announced in the Budget are unlikely to have a significant impact on the housing market.
“The high value council tax surcharge, which is not being introduced until April 2028, will apply to less than 1% of properties in England and around 3% in London.”
Nationwide is also predicting that housing affordability will improve.
He also said the higher tax rates on landlords’ rental income may see fewer rental homes being sold but rents will continue rising.
Property sector reaction to Nationwide’s data
Guy Gittins, the chief executive of Foxtons, said: “The latest Nationwide figures show that, despite the uncertainty surrounding the Autumn Budget, the market has remained resilient.
“With Budget-related uncertainty now behind us and no changes to property taxes for the vast majority of the market, confidence is expected to rebuild as more households feel ready to resume their moving plans over the coming months.
“As we head into the New Year, the outlook is encouraging. Underlying demand remains strong, and this should help support activity as buyers and sellers re-engage.”
Verona Frankish, Yopa‘s chief executive, said: “A monthly increase in property values between October and November demonstrates just how robust the housing market has been, during a year that has been anything but settled when taking a wider view of the economic landscape.
“Buyers remain engaged, market activity is holding firm, and the market continues to move forward.”
Tom Bill, the head of UK residential research at Knight Frank, said: “UK house prices have essentially been flat since the pre-Budget speculation began in the summer.
“Like many other parts of the economy, buyers sat on their hands until there was more clarity.
“Property-specific tax hikes are unlikely to affect house prices, particularly in the short-term, but the array of other rises will eventually take their toll.
“The good news is that mortgage rates should continue to edge lower as the Bank of England lowers rates into next year and the base rate bottoms out at around 3.25%.”
Propertymark‘s chief executive, Nathan Emerson, said: “With so much anticipation built up ahead of the Autumn Budget and continued uncertainty affecting both homeowners and landlords, an easing in house price growth annually is unsurprising.
“Economic anxiety has clearly influenced decision-making, and the market has responded accordingly.
“Even so, the priority now is to fully restore stability heading into the New Year.”
Iain McKenzie, the chief executive of The Guild of Property Professionals, said: “One of the factors keeping price growth modest is the rise in the number of homes coming to market compared with last year.
“Buyers now have more choice than they’ve had in years, which is helping to keep price pressures in check and encouraging more realistic, grounded negotiations on both sides.”