Key headline numbers
- In October 2025, UK house prices increased by 0.3% month-on-month, after a 0.5% rise in September. (MoneyWeek)
- On an annual basis, prices edged up to 2.4% year-on-year growth in October, from 2.2% in September. (IFA Magazine)
- The average UK home price now stands at about £272,226 (from approximately £271,995 in September). (MoneyWeek)
What this suggests: a steady, resilient market
- The market is showing moderate growth, rather than sharp acceleration or contraction — this suggests stability. The small month-on-month gain (0.3%) shows caution, but growth nonetheless.
- According to Robert Gardner, Chief Economist at Nationwide:
“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience…” (IFA Magazine)
- Key underlying supports: relatively healthy earnings growth, strong household balance sheets, and the fact that mortgage approvals are “close to pre-pandemic levels”. (MoneyWeek)
- On the costs side: mortgage rates are more than double what they were before Covid—so the market is holding up despite higher borrowing costs. (IFA Magazine)
- Affordability may improve modestly if earnings continue to outpace house-price growth and if interest rates begin to decline. (IFA Magazine)
Risks & things to watch
- Consumer confidence is subdued. Some signs of labour-market weakening. All of which could dampen buyer activity. (IFA Magazine)
- Uncertainty ahead of the Budget (especially regarding property taxes) is likely to spur a “wait and see” behaviour in some buyers and sellers. For example: proposals around replacing Stamp Duty with a national property tax, or changes to Capital Gains Tax on housing. (MoneyWeek)
- Regional variation remains significant (as noted in earlier September data): Northern Ireland markedly stronger, some parts of England slower. (MoneyWeek)
Additional insights
- Renovations and improvements are playing a role: Nationwide’s analysis shows that extensions or loft conversions adding a bedroom can boost home values by up to ~24%. (Nationwide)
- The market is not surging, but it’s far from collapsing — which may be good news for those looking to buy or sell with moderate expectations.
- Because the Budget looms, some potential buyers may hold off, which could dampen transaction volumes even if values remain stable.
Implications for different stakeholders
- Homebuyers: Might find less competition at the very top end of the market (given tax uncertainty) — but still need to account for higher borrowing costs and only modest price growth.
- Home-sellers: Good news that values are holding/gradually rising; yet excess expectations (hoping for big jumps) may need tempering.
- Investors: Stability is attractive; tax uncertainty is a variable to watch carefully.
- Policy watchers: The effect of whatever comes out of the Budget could tip the balance: e.g., if property taxation changes are substantial, that might impact values or demand.
- Here are case studies and commentary on the latest Nationwide Building Society House Price Index (HPI) data showing the UK housing market stabilising ahead of the Budget.
Key commentary
- Nationwide’s Chief Economist Robert Gardner says:
“The housing market has remained broadly 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 struck.” (IFA Magazine)
“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.” (IFA Magazine)
Looking ahead: “Housing affordability is likely to improve modestly if income growth continues to out-pace house-price growth … Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters.” (IFA Magazine) - Industry reaction:
- Guy Gittins (CEO of Foxtons) noted “the latest Nationwide figures suggest that the housing market momentum has remained steady … further upward price growth on both a monthly and annual basis reflecting cautious confidence within the market.” (Property118)
- Iain McKenzie (CEO of The Guild of Property Professionals) said the market is “regaining its footing … a modest rise in annual house-price growth … underline the resilience we’ve seen building throughout 2025.” (Property Industry Eye)
Case study 1 – Home improvements boosting value
- Nationwide research found that extensions or loft conversions adding a bedroom can boost a home’s value by up to ~24%. (Nationwide)
- As one example: on a property valued at £500,000, such an extension could add around £120,000. (MoneyWeek)
- Adding an extra bedroom (for an existing two-bedroom house) was shown to add approx 13% to value. (MoneyWeek)
- Insight: In a market where overall growth is modest (2.4% yr/yr), targeted improvements can deliver significantly higher returns than baseline market movement.
Case study 2 – Regional performance disparities
- For Q3 2025 (three months to September), Nationwide’s regional data show large variation:
- Northern Ireland achieved annual growth of ≈ 9.6%. (nationwide-intermediary.co.uk)
- England as a whole slowed to ~1.6% annual growth. (Nationwide)
- The Outer South East region was particularly weak, with annual growth of just ~0.3%. (Nationwide)
- Insight: Even when headlines show “UK average” growth of ~2.4%, local markets differ significantly — key for buyers/sellers to focus regionally.
Case study 3 – Market ahead of Budget and tax-uncertainty
- According to Moneyweek’s summary of Nationwide data:
“Budget uncertainty is starting to hit new sales agreed over £500,000 which will limit further growth in sales over 2026 unless the Chancellor makes a bold move such as cutting Stamp Duty in the Budget.” (MoneyWeek)
- Commentary flagged that while values are steady, transaction volumes may be more affected by impending tax changes (e.g., possible national property tax, changes in CGT on high-value homes). (MoneyWeek)
- Insight: Stability in prices doesn’t guarantee momentum in activity — regulatory/tax-policy risk remains a key wild card.
Implications and take-aways
- For a buyer: modest price growth (~2–3% annually) means less fear of a “big drop”, but also less chance of fast gains — value-adding improvements make more difference than relying on pure market appreciation.
- For a seller: in regions with strong growth (eg Northern Ireland) you may have more room; in weaker regions you may need realistic pricing and highlight value-adding features.
- For investors: Focus on segments where improvements, location or extra bedrooms = premium; be cautious of regions with weak growth and tax uncertainty at top end.
- For policy watchers: The resilience of the market despite higher borrowing costs suggests underlying strength (earnings growth, strong household balance sheets) but also highlights how policy/tax changes can trigger behavioural shifts (buyers pulling forward purchases, or deferring).
- Nationwide’s Chief Economist Robert Gardner says: