House prices hit record high but overall growth slows
UK house prices reached a record high in November, however overall growth slowed to the weakest rate since 2024 according to the latest data from Halifax’s house price index.
Prices were broadly unchanged last month, edging up £138, bringing the average house price to £299,892, a new record high.
This follows a 0.5 per cent price increase in October.
However, annual growth slowed to 0.7 per cent, down from 1.9 per cent in October, marking the weakest rate since March 2024.
Industry figures have credited this “static period” to Budget uncertainty prior to November 26, in particular over potential tax rises.
Karen Noye, head of mortgages at Quilter, said: “The market has not moved an inch in what has been a very static period as many buyers waited for clarity on housing measures in the budget.
“The dust has now settled post budget, giving borrowers a clearer view of what the early months of 2026 may look like.”
However, Capital Economics noted that the housing market has been resilient in the face of high mortgage rates, weak employment and Budget uncertainty.
Coupled with increasing mortgage approvals it suggests house price growth will pick-up next year.
Outlook for house prices
Amanda Bryden, head of mortgages at Halifax, echoed the claim the market will return to growth in 2026.
She said: “Looking ahead, with market activity steady and expectations of further interest rate reductions to come, we anticipate property prices will continue to grow gradually into 2026.”
Nathan Emerson, chief executive of Propertymark, also noted that further interest rate reductions will “revitalise mortgage lending and support a healthier market”.
However, for first time buyers, affordability remains an issue.
Noye said: “Affordability remains the biggest hurdle.
“Inflation has eased and there is a growing expectation of a first rate cut in December, but mortgage pricing is still sensitive to shifts in swap rates and global pressures.
“Fixed rates have dipped, yet progress is gradual and high living costs continue to limit how far borrowing power can stretch, particularly for first time buyers.”
South tells another story
While the overall average price paints a promising picture for the UK housing market, it fails to reflect the Southern market.
The North West recorded the highest annual growth rate, with property prices up 3.2 per cent to £245,070, closely followed by the North East, where prices hit £180,939.
While London property prices tumbled 1.0 per cent, it remains the most expensive market, with houses averaging £539,766.
The introduction of a ‘mansion tax’ in the Autumn Budget, which will subject properties over £2m to higher council tax from 2028, will also disproportionately affect the capital, putting pressure on home owners who are “asset rich and not cash rich”.
Meanwhile, first time buyers who may be relying on a Lifetime ISA to purchase a home will also continue to be affected in London, due to £450,000 cap.
Spending over the cap causes buyers to lose both the government bonus and their own money.