Nationwide: Despite uncertainty surrounding the Autumn Budget, UK property values continue to rise

September saw a stable increase in the average price of homes, although there were regional variations

Which area has the highest cost?

In the run-up to the Autumn Budget, the housing market seems to have had a steady September.

Average property values increased by 0.5 percent on a monthly basis, according to the most recent Nationwide House Price Index, countering a 0.1 percent decline in August.

Additionally, annual growth in house prices increased marginally from 2 percent to 2 percent.

This resulted in an average house price of 271,995 in the UK.

It coincides with uncertainty surrounding property taxes, as chancellor Rachel Reeves is reportedly considering substituting a national property tax for stamp duty on the sale of homes valued at more than 500,000 in her Autumn Budget.

It has also been reported that capital gains tax may be imposed on properties sold for more than £1 million.

"Despite persistent uncertainties in the global economy, underlying conditions for prospective home buyers in the UK remain supportive," stated Robert Gardner, chief economist for Nationwide.

"If the Bank Rate is lowered in the upcoming quarters as we and the majority of analysts anticipate, borrowing costs should moderate a bit more. The unemployment rate is low, earnings are increasing at a healthy rate, and household balance sheets are strong.

In the upcoming quarters, housing market activity is anticipated to gradually improve, assuming the overall economic recovery is sustained.

Are the costs of homes increasing?

Stamp duty thresholds were lowered in April, which increased the cost of purchasing a home and slowed the growth of house prices in recent months.

Due to a decline in demand, more homes are now available for purchase.

Lower mortgage rates, however, are also helping buyers, which is motivating many to move forward in spite of uncertainty surrounding future property taxes.

The data on average home prices conceals the dynamics of several distinct markets in the United Kingdom.

With an annual house price growth of 9.6 percent during the quarter, Northern Ireland continued to be by far the best performer, according to Nationwide.

Scotland saw a slowdown in annual house price growth from 4point 5 percent to 2point 9 percent, while Wales saw a slight increase to 3 percent from 2point 6 percent in the second quarter.

The annual growth rate of house prices in England slowed further, from 2 percent in the second quarter to 1 point 6 percent.

The average price in the north of England increased 3 percent year over year, while in the south, it slowed to 0.7 percent.

The type of property is also associated with price growth.

According to nationwide data, the largest percentage increase in price over the last 12 months has been seen by semi-detached properties, with average prices rising 34% annually.

At 2 percentage points and 2 percentage points, respectively, detached and terraced properties experienced comparable growth. Flats, however, saw a slight 0.3 percent year-over-year decline.

It comes as Bank of England data indicates that the number of mortgage approvals fell in August, and Zoopla warned earlier this week that the top end of the real estate market has stalled because of uncertainty surrounding the Autumn Budget. This may portend a slower market going forward, at least until the November Budget results.

Commenting on the data, Knight Frank's head of UK residential research, Tom Bill, stated: "Demand and prices are continuing to decline due to high supply and a growing sense of uncertainty as November's Budget draws near.

We recently downgraded our 2025 UK forecast to 1 percent from 3 to 5 percent because steady mortgage rates so far this year have pushed buyers to take action, but a rerun of last year's guess-the-tax-rise-before-the-budget game means hesitancy will increase over the next two months. In order to attract buyers for a viewing, sellers must set reasonable asking prices as the market shifts more and more toward being a buyers market.