UK house prices rose for a second consecutive month in November, defying pre-budget uncertainty and signalling continued stability in the property market, according to the latest Nationwide index. The country’s largest building society reported a 0.3% monthly increase, outperforming economists’ expectations of a modest 0.1% rise. The average UK home now costs £272,998, up from £272,226 in October.
The data comes just days after the chancellor, Rachel Reeves, unveiled a new “mansion tax” style surcharge on high-value homes in England, due to take effect from April 2028.
New Tax on High-Value Homes
The government’s new surcharge will apply to properties worth £2m or more, divided into four bands. Annual charges will begin at £2,500 for homes valued above £2m and rise to £7,500 for those over £5m. The measure forms part of the wider fiscal package Reeves announced as she attempts to stabilise public finances and fund essential services.
Nationwide’s chief economist, Robert Gardner, said the policy is unlikely to affect the housing market significantly. “The high-value council tax surcharge will apply to less than 1% of properties in England and around 3% in London,” he said, stressing that the impact would be limited to a very small part of the market.
Stable Annual Growth
Annual price growth slowed to 1.8% in November, the weakest rate since June, but still exceeded analyst forecasts of 1.4%. October’s annual rise stood at 2.4%. Gardner said the figures highlight the market’s resilience. “Against subdued consumer confidence and signs of labour market weakness, this performance shows stability,” he said. “Prices have been rising at a modest but steady pace.”
Interest Rates and Market Sentiment
Lower borrowing costs have helped support the property market. The Bank of England cut interest rates in August and voted narrowly last month to hold them at 4%. The Bank also said inflation likely peaked at 3.8%—lower than expected—improving the outlook for additional rate cuts in 2026.
Mortgage brokers report that household sentiment has remained cautious, with some buyers delaying decisions until after the budget. Mark Harris, chief executive of SPF Private Clients, said lenders remained eager to fund loans despite a quieter market. He noted that borrowers may now be weighing whether to wait for lower rates or lock in early to avoid potential fluctuations.
Outlook for 2026
Financial analysts say the property market could see stronger momentum in early 2026. Sarah Coles, head of personal finance at Hargreaves Lansdown, said the budget had prompted many buyers to pause, but next year may bring renewed confidence. “We often see a boost in January, and despite the challenges, several factors are now working in the market’s favour,” she said. “The new property tax will only affect a small part of the market, which should reassure the majority of buyers.”
Overall, Nationwide’s data suggests the housing sector continues to show resilience, supported by easing inflation, stable interest rates and ongoing buyer demand.
