Nationwide: Despite concerns about the budget, the market held steady despite a slowdown in the growth of home prices

According to Nationwide, the average cost of a home in the UK was pound 272,998 in November, with annual house price growth slowing to just 18%

Annual house price growth dipped in November but the market remained resilient despite threats of increased taxation in the Autumn Budget, new figures show.

According to the Nationwide House Price Index, home prices increased by 1.8 percent in the year ending in November, a decrease of 0.6 percentage points from October's annual price growth estimate of 2.4 percent.

Between October and November, the average price of a UK home rose by 0.3 percent due to the slower rate of annual growth, resulting in a month-over-month increase of 772.

House prices nationwide.

"The housing market has remained fairly stable in recent months, with house prices rising at a modest pace and the number of mortgages approved for house purchase maintained at similar levels to those prevalent before the pandemic," stated Robert Gardner, chief economist at Nationwide.

"Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all-time highs. A "

Did home prices change as a result of the budget?

In November, many homeowners and prospective buyers will have been anticipating a shake-up to how property is taxed in the Autumn Budget, which was delivered on 26 November.

The chancellor was reportedly going to raise property taxes in the weeks preceding it, but the majority of owners were spared. The new mansion tax only applies to homes valued at £2 million or more.

Although consumer sentiment was negatively impacted by these rumors prior to the Budget, there does not appear to have been a noticeable decline in the market.

Gardner at Nationwide believes the new mansion tax is "unlikely to have a significant impact on the housing market" in the long term as the new levy will apply to less than 1 percent of properties in England and around 3 percent in London.

Gardner anticipates a more significant effect from the higher income tax rate on property income since it might reduce the availability of new rental properties.

Bestinvest personal finance analyst Alice Haine concurs, referring to the two percentage point tax increase as a "sting in the tail" for landlords.

"After years of rising taxes and tighter regulations, this could be the tipping point for some landlords, prompting sales, while others may resort to passing on increased costs to tenants pushing rents even higher," she continued.

What is the future direction of home prices?

Following a Budget where the worst-case scenarios were avoided, Gardner at Nationwide believes the outlook for some buyers is set to improve.

"Going forward, housing affordability is likely to improve somewhat if income growth continues to outpace house price growth as we anticipate," he stated. Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters.

"This should support buyer demand, especially since household balance sheets are strong. In fact, the overall household debt to disposable income ratio is at its lowest point in twenty years. A "

Haine at Bestinvest also anticipates more affordability in the market, saying that following this Autumn's pre-Budget decline, market confidence may rebound due to an increase in buyer demand and listings.

She said: "While property tax changes may dampen demand at the upper end of the market, and higher taxation could accelerate buy-to-let exits, there could be a resurgence in wider market activity. In an effort to evaluate the effects of any new measures, buyers who put their moving plans on hold in the lead-up to the budget may now make a comeback. The "

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