The UK housing market showed unexpected resilience in November, with prices rising despite pre-budget uncertainty, according to the latest figures from Nationwide Building Society. The lender also downplayed the potential impact of the new high-value property surcharge announced by Chancellor Rachel Reeves.
Market Defies Expectations with Steady Growth
The average UK house price increased by 0.3% month-on-month in November, a stronger performance than the 0.1% rise forecast by economists. This pushed the average property value to £272,998, up from £272,226 in October.
While the annual rate of house price growth slowed to 1.8% – the weakest pace since June – it still surpassed expectations of a 1.4% increase. Robert Gardner, Nationwide's Chief Economist, noted the market's stability. "Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience," he said.
Limited Impact Predicted for 'Mansion Tax'
All eyes were on the Chancellor's autumn budget, which included a new council tax surcharge for high-value homes in England. From April 2028, properties valued at over £2 million will face an additional levy.
The surcharge structure includes four bands:
- £2,500 annually for properties worth over £2 million.
- Rising to £7,500 per year for homes valued above £5 million.
However, Nationwide believes this policy, often dubbed a 'mansion tax', will have minimal effect on the broader market. Gardner stated the surcharge "will apply to less than 1% of properties in England and around 3% in London." Consequently, the building society concluded the budget's property tax changes are "unlikely to have a significant impact on the housing market."
Interest Rates and Future Outlook
Lower borrowing costs have provided some support to market activity. The Bank of England held its base rate at 4% in November, but signalled that inflation had likely peaked lower than previously forecast, paving the way for potential future cuts.
This environment creates a complex picture for buyers and sellers. Mark Harris, CEO of mortgage broker SPF Private Clients, observed a 'wait and see' approach among some, but confirmed lenders remain keen to lend. He advised, "those concerned about budgeting and rate rises might wish to consider locking into a cheaper rate now."
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, suggested the budget provided clarity. "There’s a decent chance that 2026 will usher in more positivity," she said, highlighting that the new property tax affects only a "small slice of the market."
The data suggests the UK property market is navigating economic headwinds with notable steadiness, with major tax changes expected to touch only the very top tier of homeowners.
