House price increases stall under budget constraints
The Autumn Budget, delivered by Chancellor Rachel Reeves on Wednesday, has had a noticeable impact on the UK housing market. According to Nationwide's House Price Index data and related expert analysis, the Budget has contributed to buyer uncertainty, leading to a downward revision in house price growth forecasts.
Slowing House Price Growth
The annual house price growth slowed significantly in 2025, from 4.7% in December 2024 to around 2.1% by June 2025. This reflects weaker buyer activity as the Autumn Budget approached and concerns over its implications mounted. Forecasters such as Savills and Rightmove substantially downgraded their 2025 house price growth expectations from initial forecasts of 4% annual growth at the start of the year to just 1-2% growth by mid-2025.
Tax Increases and Fiscal Tightening Measures
The slowdown suggests that the Budget's tax increases and fiscal tightening measures may have dampened buyer confidence, leading to subdued demand and slower price appreciation in the housing market. On a monthly basis, this resulted in lower or negligible month-on-month price increases, contributing to the overall weaker annual rate of growth.
Longer-Term Prospects
Despite this short-term slowdown in growth, some forecasts remain cautiously optimistic about longer-term prospects. Institutions like Savills project moderate price growth of around 24.5% over five years to 2029, slightly revised upward due to a potential market reset after the period of uncertainty.
Stability and Recovery
Ed Phillips, Lomond CEO, stated that the slowing of house price growth in October was likely due to Autumn Statement uncertainty. His comments suggest that stability has been a key factor in the recovery of the UK housing market. Despite the Budget, the market still recorded positive growth, with house prices climbing by 0.1% in October compared to September. Marc von Grundherr, director of Bentham and Reeves, echoed this sentiment, commenting that despite the Budget, the market is still moving.
Investment in Housing
In related news, £5 billion is to be invested into delivering more homes between 2025-26. Homes England has been welcomed to a new development in Manchester, a testament to the government's commitment to addressing the housing shortage.
Meeting Housing Targets
However, not all councils are meeting their housing targets. Wealden Council is facing difficulties in meeting new housing targets, highlighting the ongoing challenges in addressing the housing crisis.
Access Nationwide's Full Figures
For those interested, Nationwide's full figures for the housing market can be accessed for a more detailed analysis of the current state of the UK housing market. Despite the challenges posed by the Autumn Budget, the housing market remains a key area of focus for the government, and developments in this sector will continue to be closely watched.
1) The fiscal tightening measures and tax increases in the Autumn Budget may have reduced buyer confidence, potentially affecting the housing finance market and contributing to the slowed house price growth in 2025.
2) The housing lifestyle in the UK,. despite the short-term slowdown, could benefit from long-term prospects, as institutions like Savills project moderate price growth of around 24.5% over five years to 2029, given a potential market reset after the period of uncertainty.
