Remember the mad panic before the Autumn Budget when everyone thought the Chancellor was about to hammer anyone who owned more than a garden shed? I certainly do – my inbox was full of worried messages from friends convinced their two-bed terrace was about to become a tax nightmare. Turns out most of us dodged the bullet, and the latest figures suggest the housing market just shrugged, had a cup of tea, and carried on.
UK House Prices: Still Rising, Just More Politely Now
November’s numbers are in, and the average UK home now costs £272,998. That’s up a modest £772 from October, or 0.3% if you prefer percentages. Year-on-year growth has eased back to 1.8%, down from 2.4% the month before. In plain English: prices are still going up, but at the sort of pace that lets you finish your coffee before the value of your house changes.
Honestly, I find that rather reassuring. After the roller-coaster of the past few years – pandemic boom, mini-Budget bust, mortgage-rate shock – a bit of calm feels almost unnatural. But calm it is.
Why the Slowdown Feels Like a Soft Landing
Several things are keeping a lid on runaway growth right now.
- Mortgage rates are still miles above the rock-bottom levels we got addicted to post-Covid
- Consumer confidence took a proper wobble in the run-up to the Budget
- Job market chatter has turned noticeably cooler (layoff headlines don’t help anyone feel like stretching to a bigger mortgage)
And yet, prices didn’t fall. Transactions haven’t collapsed. Mortgage approvals are ticking along at roughly pre-pandemic norms. That tells you the fundamentals – wages growing faster than inflation, decent household savings buffers, chronic lack of new homes – are still doing their quiet work in the background.
“The housing market has shown remarkable resilience lately. With borrowing costs double their pre-Covid levels and prices near all-time highs, you’d expect more drama. The fact we’re not seeing it speaks volumes about underlying strength.”
– Chief economist at a major UK lender
The Budget That Wasn’t the Disaster Everyone Feared
Let’s be honest – October was grim for sentiment. Rumours swirled that capital gains tax on primary residences was on the table, or that stamp duty was about to get savage, or that inheritance tax relief on homes was toast. Estate agents reported chains freezing as buyers and sellers waited to see which limb was getting chopped off.
In the end, the Chancellor left 99% of homeowners completely untouched. The only real sting was a new “mansion tax” layer for homes worth over £2 million – which affects fewer than 1% of properties outside London and maybe 3% inside the M25. Hardly the apocalypse.
There was, however, one sneaky move that flew under most radars but could matter more in the long run.
Landlords Just Got Hit Again – And Renters Might Feel It
Tucked away in the small print was a two-percentage-point increase in the tax rate on rental income for higher-rate taxpayers. For anyone who’s been a landlord since 2016, this feels like yet another turn of the screw – first Section 24 mortgage interest restriction, then the 3% stamp duty surcharge, then EPC rules, now this.
Plenty of smaller landlords I speak to are at breaking point. Many are now openly saying November’s tax change was the final straw. Expect a slow but steady drip of buy-to-let properties coming to market over the next couple of years.
The knock-on effect? Fewer rental properties + strong tenant demand = higher rents. Again. If you’re a tenant already feeling squeezed, I’m afraid the relief might be short-lived.
What Happens Next? My Take on 2025-2026
Putting my neck on the line (as I do every December), here’s how I see things playing out.
- Modest price growth continues: Probably 2-4% nationally in 2025, maybe touching 5% in hotter spots.
- Affordability slowly improves: If wages keep outpacing inflation and the Bank of England delivers the two or three rate cuts most economists expect, mortgage payments as a share of income will edge down from their current painful levels.
- First-time buyers get a gentle tailwind: Higher loan-to-income limits, continued demand for 95% mortgages, and (crucially) more realistic asking prices from sellers who’ve accepted 8% rates aren’t coming back any time soon.
- London and the South East finally wake up: After years of lagging the regions, the capital looks poised for a catch-up phase as international buyers return and domestic buyers realise remote work doesn’t have to mean moving to Barnsley.
None of this is rocket science. It’s just the normal cycle reasserting itself after a decade of abnormal.
Think about it: UK housing has spent years being artificially suppressed by high stamp duty, then artificially inflated by ultra-low rates and pandemic panic-buying, then squashed again by the Truss debacle and 2023’s rate shock. We’re finally drifting back toward equilibrium – where prices grow roughly in line with earnings, transactions happen without six months of gazundering, and nobody feels compelled to write breathless “crash incoming” articles every other week (guilty as charged in the past).
Regional Winners and Losers in the New Normal
Not everywhere moves at the same speed, of course.
The North West and Yorkshire continue to offer the best combination of affordability and wage growth. Manchester and Leeds in particular feel like they still have plenty of upside left.
Scotland has quietly become one of the strongest performers since the pandemic – lower prices than southern England but similar wage growth and a chronic undersupply of new homes.
London, believe it or not, now looks undervalued relative to earnings in zones 2-4. Rents have gone absolutely berserk while prices have barely budged in five years. That gap rarely lasts forever.
Should You Buy, Sell, or Sit Tight Right Now?
If you’re a first-time buyer who paused because of Budget scaremongering – get moving again. The worst didn’t happen, and every month you wait is another month of rent down the drain while prices gently tick higher.
If you’re a landlord with a portfolio of three or fewer properties and you’re not in love with the administrative hassle anymore – now’s actually not a terrible time to crystallise gains. Capital gains tax rates didn’t go up (another rumour that proved false), and there are plenty of cash-rich buyers hunting for family homes.
If you’re already happily housed and not forced to move – congratulations, you’ve won the game. Sit tight, overpay the mortgage while rates are relatively high, and enjoy the fact your home is quietly compounding in value without you having to do anything dramatic.
Whatever camp you’re in, the big takeaway from November’s numbers is simple: the UK housing market didn’t need saving from the Budget because it was never in mortal danger in the first place. Boring? Maybe. But after the past five years, I’ll happily take boring.
So there we have it – house prices still rising, just politely and predictably. No fireworks, no collapse, no new taxes on the average home. Just the slow, steady grind upward that has defined British property for generations. And frankly, after everything we’ve been through, that feels like exactly what the doctor ordered.
