The UK's housing market displayed a mix of cooling annual growth and underlying resilience in November, according to the latest data from Nationwide Building Society.
Annual Growth Softens as Market Holds Steady
Nationwide announced this morning that annual house price growth softened to 1.8% in November, down from the 2.4% recorded in October. Despite this moderation, prices still managed a 0.3% increase month-on-month after seasonal adjustments were taken into account.
Robert Gardner, Nationwide's Chief Economist, commented on the figures, stating the market had "remained fairly stable in recent months." He noted that house prices were rising at a modest pace and mortgage approvals for purchases were being maintained at levels similar to those seen before the pandemic.
Resilience Against Economic Headwinds
Gardner highlighted the market's strength given the challenging economic backdrop. "Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience," he said. This is particularly notable as mortgage rates are more than double their pre-Covid levels and property values remain close to historic highs.
He also addressed the potential impact of recent government policy, suggesting the property tax changes outlined in the Autumn Budget are unlikely to significantly sway the market. The high-value council tax surcharge, delayed until April 2028, will affect fewer than 1% of English properties and approximately 3% in London.
Rental Market and Future Outlook
The economist pointed to a potential consequence for the rental sector, warning that increased taxes on property income could further dampen the supply of new rental homes. "Rental supply has been constrained for some time," Gardner said, "with the potential for this to maintain upward pressure on rental growth."
Looking ahead, Gardner offered a cautiously optimistic view on affordability. "Housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect," he projected. He added that borrowing costs could ease further if the Bank of England lowers the base rate in coming quarters, which should support buyer demand. He emphasised the underlying strength of household finances, noting the aggregate ratio of household debt to disposable income is at a two-decade low.
Industry experts echoed the sentiment of resilience. Darryl Dhoffer, founder of Bedford-based The Mortgage Geezer, said: "Despite high interest rates, high inflation and an economy running on fumes, the property market has shown resilience in 2025." He attributed the market's stability to a structural undersupply of homes and robust pay growth supporting affordability. "Those predicting a crash in property prices have once again been proved wrong," Dhoffer concluded, "as the market is simply adjusting to a slower pace, not collapsing."
