UK property values increase as the market stabilizes ahead of the budget, according to the countrywide HPI

After rising by 05 percent in September, monthly home prices increased by 03 percent

As the market showed signs of resilience ahead of the Budget, house prices continued to rise in October.

After rising by 0.5 percent in September, the most recent Nationwide House Price Index (HPI) indicated that average property values increased by 0.3 percent on a monthly basis.

The annual growth rate of house prices also increased marginally from 2 percentage points in September to 2 percentage points in October, according to the Building Society.

The average home price increased from 271,995 in September to 272,226 today.

The housing market is still stable, according to Robert Gardner, chief economist at Nationwide, with mortgage approvals nearly at pre-pandemic levels and modest price increases.

He stated: "This performance shows resilience against a backdrop of muted consumer confidence and signs of a weakening labor market, particularly given that mortgage rates are more than double what they were prior to the Covid pandemic and that house prices are near all-time highs."

According to Gardner, housing affordability would increase "modestly" if wages keep up with home prices and interest rates decline as expected.

Ahead of next month's Autumn Budget, Rachel Reeves is reportedly considering property taxes as a way to boost the government's finances, according to the most recent data from Nationwide.

The Chancellor could eliminate the exemption from capital gains tax on primary residences valued at more than 1.05 million and introduce a new tax on the sale of homes over 500,000 that would take the place of Stamp Duty.

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, stated that the market was being cautious due to expectations for the upcoming month.

"With mortgage approvals edging up slightly in September, buyers have been gradually adjusting to the end of the stamp duty tax break in the Spring," Haine said. However, it seems that market activity is being slowed down by the new uncertainty surrounding possible property tax reforms.

She also mentioned that the usual Christmas-related slowdown had already begun as buyers and sellers awaited any announcements from the Chancellor.

According to seasonally adjusted data released by HMRC on October 31, there were 95,980 residential housing transactions in September, which was 4% more than the same month the previous year and 1% more than August 2025.

There were 102,420 residential transactions, according to non-seasonally adjusted estimates, which was 8% more than September 2024 and 2% less than August 2025.

With 350,000 homes nearing completion, the housing market is currently experiencing its largest sales pipeline in four years, according to Richard Donnell, executive director of the real estate portal Zoopla.

"Now that transactions are back in line with the long run average of 1 to 2 million sales a year, we expect them to start to plateau," he continued.

"Uncertainty in the budget is beginning to affect new sales agreed over 500,000, which will limit further growth in sales over 2026 unless the chancellor makes a bold move like cutting Stamp Duty in the Budget which would boost sales," Donnell cautioned about the budget.

House prices in the UK have increased since October 2015, according to nationwide data.

Top home remodeling projects are revealed.

In a separate study, Nationwide revealed today which home improvements were most common over the previous five years.

The most common renovations, according to the Building Society, were in the kitchen and bathroom, with 71% of respondents doing either or both.

Meanwhile, 25% of respondents added a second toilet to their property, and 42% added a bathroom or ensuite.

About one-third of those who worked on the project added solar panels to their property, accounting for 56% of the green improvements.

In the last five years, 69 percent of younger homeowners (those between the ages of 25 and 34) had upgraded their homes to be more environmentally friendly, according to a nationwide survey.

On the other hand, only 18 percent of older homeowners (those over 55) reported making green improvements in the previous six months.

According to research by the Building Society, some home improvements can increase a home's value by as much as 24%. Examples of these improvements include loft conversions and extensions. That would add 120,000 to a property valued at £500,000.

It was discovered that an additional bedroom increased a property's value by 13%. That would be an additional 65,000 on a 500,000-dollar home.

Gardner stated: "Although location is still crucial for home values, buyers also consider other aspects like the number of bedrooms.

Buyers are willing to pay more for more usable space, he continued, adding that the average home's price would increase by about 5% for every 10% increase in floor space.

But according to our analysis, the most important factor in increasing value is the number of bedrooms. An existing two-bedroom home's value can increase by 13%, for instance, by adding space to accommodate a second double bedroom, he said.