Annual house price growth edges up to 2.4% in October: "The housing market has held its ground rather than fizzled out"

The annual rate of house price growth increased slightly to 2.4% in October with experts saying "the housing market has held its ground rather than fizzled out".

House prices were also up 0.3% month on month, according to the Nationwide House Price Index (HPI).

Robert Gardner, Nationwide's Chief Economist, said the housing market has remained broadly stable in recent months.

He added: “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. 

“Looking forward, housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect. Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters.

“This should support buyer demand, especially since household balance sheets are strong – indeed, in aggregate the ratio of household debt to disposable income is at its lowest for two decades."

Brokers and financial experts said buyers are still being cautious ahead of the Budget next month.

Ken James, Director at London-based Contractor Mortgage Services, said: "On the surface, this latest house price index from Nationwide suggests the market is slowly gaining momentum. However, sentiment remains cautious. 

“With the Budget looming ever closer on the horizon, many buyers and sellers are holding their breath, waiting to understand how new fiscal measures might shape affordability, tax policy and incentives. There’s progress, but uncertainty is still the main driver.”

Omer Mehmet, Managing Director at Welling-based Trinity Finance, is looking forward to November's figures with interest.

He continued: "There have been no fireworks in the property market this year but, as ever, it has held its ground rather than fizzled out. Amid all the uncertainty, prices continue to rise, showing the resilience of bricks and mortar. 

“November is set to be a key month as the Budget has the potential to impact confidence. An interest rate cut by the Bank of England could also boost sentiment.”

Scott Gallacher, Director at Leicester-based Rowley Turton, pointed out inflation means house prices are actually slipping.

He added: “House prices may be rising on paper, but in real terms they’re still slipping with inflation at 3.8%. 

"The UK housing market is a paradox — weak economic data and high borrowing costs should cool it, yet years of underbuilding, nimbyism planning restrictions, and government support schemes such as the Lifetime ISA continue to prop prices up.”

Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said the resilience of the property market is impressive despite uncertainty.

She continued: "Never against bricks and mortar. Despite numerous economic headwinds and all sorts of uncertainty ahead of the Budget, the property market is holding its own. 

“By this time next month, households will know what they are dealing with and there should be some more clarity on the direction of prices as we head into 2026. A cut from the Bank of England has the potential to jumpstart activity levels.

Chris Barry, Director at London-based Thomas Legal, was surprised by the figures.

He added: "Today’s data certainly bucks the trend of what we are seeing in terms of new deals being agreed. Stock levels are at a decade high and new buyers registering are 5% down on last year. 

“House price data sets are likely to start reporting a reduction over the coming months, especially as November and December see increased numbers of completions due to clients wanting to complete in time for Christmas. The Chancellor will have to incentivise buyers in the autumn, or rather, winter Budget to even out supply and demand and prevent the inevitable drop in house prices.”

Michelle Lawson, Director at Fareham-based Lawson Financial, added: “Any upward trajectory is a positive but what these figures really show is that the housing market is a damp squib. There have been a few promising sparks but they are extinguished just as quick. 

"People want to buy and move, some need to. The housing market is an important catalyst for so many others, and the Government needs to start treating it as such. Will the Chancellor’s Budget be the one to light the touch paper or will she be holding the water to put it out?”