UK house price growth slowed to its weakest annual pace since 2024 in October, with prices rising just 0.5% year-on-year, down from 0.8% in September. The average property price stood at £273,566, unchanged from the previous month and below the April peak of £278,880. Nationwide’s chief economist attributed the slowdown to geopolitical uncertainty, rising energy costs, and mounting expectations of Bank of England rate hikes.
Mortgage rates continue to climb, with the average five-year fixed rate at 75% loan-to-value reaching 4.98% in September, the highest since 2023. Bank of England data showed mortgage approvals fell more sharply than expected in September, hitting their lowest level since 2023. Economists warn prices may fall further in the coming months.
The government’s new Your First Home scheme, launching in spring 2027, will allow eligible buyers to purchase new homes with a 2.5% deposit and a government-backed equity loan covering 20% of the value. However, experts caution it may not be enough to revive market activity. Meanwhile, landlords face a further 2% income tax increase from April 2027, potentially raising rents or reducing rental supply.
Knight Frank’s Tom Bill noted that rising mortgage costs outweigh any Budget support measures, and asking prices must reflect tougher financial conditions for buyers.
Source: Financial Times Companies · Summarized by HeadlinesBriefing