UK house prices rise despite budget tax fears, says Nationwide | House prices

House prices in England rose last month despite uncertainty over the budget, according to Nationwide, which predicts that the newly announced “mansion tax” will have a limited impact on the housing market.

Britain’s biggest housebuilder said the average house price rose 0.3% month-on-month in November, above the 0.1% rise predicted by economists polled by Reuters. The average price of a house rose to £272,998, up from £272,226 in October.

Last week, chancellor Rachel Reeves announced a new high-value council tax surcharge on homes worth £2 million or more in England from April 2028.

There will be four price ranges; The surcharge will start at £2,500 per year for properties valued over £2 million and rise to £7,500 for properties valued over £5 million.

“The changes to property taxes announced in the budget are unlikely to have a significant impact on the housing market,” said Nationwide chief economist Robert Gardner. “The high-value council tax surcharge will apply to less than 1 per cent of properties in England and around 3 per cent of properties in London.”

While the annual house price growth rate has slowed significantly to 1.8%, the lowest rate since last June, economists were expecting a 1.4% increase. The annual growth rate was 2.4% in October.

“In an environment where consumer confidence is weak and there are signs of weakening in the labor market, this performance demonstrates resilience,” Gardner said. “The housing market has remained fairly stable in recent months and house prices have increased at a moderate pace.”

Low interest rates helped support activity. The Bank of England last reduced borrowing costs in August, but last month decided to keep interest rates at 4% with a near-term vote of the Bank’s monetary policy committee.

But the Bank said inflation may have already peaked at 3.8%, below the previous forecast peak of 4%, which would lead to further cuts.

Mark Harris, managing director at mortgage broker SPF Private Clients, said: “Whilst the market is a little quieter as some take a ‘wait and see’ approach, lenders remain keen to lend and funds are available to do so.

“With talk of another base rate cut this month, borrowers may hold out in the hope of cheaper interest rates, but budgeting and those worried about rate hikes may want to consider locking in a cheaper interest rate now, a few months before they might need it.”

Sarah Coles, head of personal finance at Hargreaves Lansdown, said buyers were waiting to see what was in the budget.

He added: “There is a good chance that 2026 will lead to further positivity. We often see an increase in January and despite the challenges there are a few things working in the market’s favour. The budget has introduced a property tax which will only affect a small part of the market.”