Halifax: Despite concerns about the Autumn Budget tax, UK home price growth reaches a new high for 2025

Although average UK house prices are still rising, there are still issues, especially in prime markets

As average UK house prices continue to reach record highs, buyers seem to have overcome their anxiety prior to the Autumn Budget, though the majority of the growth is occurring in the country's north.

Tax increases in the Chancellor's Autumn Budget later this month may put housing market activity at risk, but according to the most recent Halifax House Price Index, average UK house prices increased by 0.6% per month in October, the largest monthly increase in 2025.

The average UK property price is now 299,862, getting closer to the 300,000 threshold. The annual growth in house prices also increased by 1.9 percent, from 1.3 percent in September.

"Despite some market uncertainty, buyer demand has held up well coming into autumn, with the number of new mortgages being approved recently hitting its highest level so far this year," stated Amanda Bryden, Halifax's head of mortgages. A "

But no one lives in a typical house, and depending on where you live and the kind of property, prices can vary.

Additionally, the Autumn Budget's threats of tax increases could alter the mood of the market in the upcoming months.

Rightmove and Zoopla, two real estate websites, have already noted a decline in demand from buyers and sellers, especially at the top of the housing market.

How is the housing market in the UK doing?

According to the most recent Halifax House Price Index, Northern Ireland is still experiencing the highest annual rate of property price inflation, with average values rising by 8.0 percent. The average cost of a home in the nation is currently 219,646.

Wales' average prices increased by 2 percent to 229,558 in October, while Scotland's average price increased by 4.4 percent annually to 216,051.

With property prices rising by 4.1 percent to 180,924, the North East saw the highest annual growth rate in England.

On an annual basis, however, prices in London and the South East decreased by 0.3 percent and 0.1 percent, respectively, in October. The average price of a property in the capital is currently 542,273, making it the most expensive region of the United Kingdom.

"There is no doubt that affordability remains a challenge for many," Bryden continued. Even though average fixed mortgage rates are currently around 4% and are probably going to drop even further, moving home can seem unattainable given the record-high prices of real estate.

"People's disposable incomes are being squeezed by rising costs for daily necessities, which has an impact on their willingness or ability to spend on a new property.

Even so, despite some volatility, the market has held up well in recent months because many buyers choose longer terms and smaller deposits in order to make the numbers work. We anticipate that the trend of steadily increasing affordability will continue since home prices have been increasing more slowly than incomes for nearly three years. A "

"The latest Halifax figures show that, despite a degree of buyer hesitation in the lead-up to the Autumn Budget, the housing market continues to move forward with prices recording another month of positive growth," stated Guy Gittins, CEO of Foxtons estate agent.

"This resilience is a result of both the strength of underlying demand and some buyer confidence after a period of more stable mortgage rates. There is a very real chance that the base rate will be lowered before Christmas if inflation continues to rise. This would increase affordability and improve consumer sentiment. A "

Will home costs increase in 2025?

Early in 2025, buyers rushed to beat changes in stamp duty thresholds at the end of March, which drove up house prices.

However, recent months have seen a decline in demand due to high inflation, worries about tax increases in the Autumn Budget, and speculation about stamp duty reform.

Many wealthy buyers have also been turned off by concerns about a mansion tax and already higher tax rates in prime London.

This has caused analysts from companies like Savills and Knight Frank to update their projections for home prices.

Due to current economic and tax concerns, Savills predicted this week that average property prices will increase by just 1 percent this year and by 2 percent in 2026, down from a previous forecast of 4 percent growth next year.

Knight Frank's head of UK residential research, Tom Bill, stated: "The bank rate is currently declining and stable mortgage rates have supported demand in recent months. However, a budget that increases taxes will reduce purchasing power and negatively impact sentiment, which will limit housing market activity in the upcoming year. A "

Beyond the consequences of the Autumn Budget, the Bank of England's future interest rate actions could determine the market's trajectory.

However, Gittins continued: "We anticipate that the UK real estate market will end the year strong, regardless of what the Bank of England decides next month, as many buyers and sellers continue to strive to finish before the end of 2025 or wish to enter 2026 with a renewed focus on their property goals. The "