The latest data shows that average house prices across the UK have slipped slightly as buyer activity slows ahead of next week’s Budget announcement.
According to the Office for National Statistics, the typical UK home was valued at £271,531 in September, down 0.6 per cent from August.
On an annual basis, growth is also easing — up 2.6 per cent over the past 12 months, compared to 3.1 per cent in the year to August.
Analysts and estate agents are pointing to a “wait-and-see” approach from buyers as Chancellor Rachel Reeves prepares to unveil her Autumn Budget on November 26.
Regional Price Changes Show a Mixed Picture
Looking at the monthly movements, nearly every English region saw house values dip.
The North East, London, and the South East experienced the largest drops between August and September.
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In the North East, prices fell 1.2 per cent, leaving the average home at £161,770.
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London saw a 1.1 per cent drop, shaving £6,381 off the average, now £556,454.
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The South East fell 1.2 per cent, with the average property costing £383,812.
In contrast, Yorkshire and the Humber bucked the trend with a small 0.3 per cent rise, bringing the average home there to £207,877. Scotland also posted modest growth, up 0.4 per cent, with average prices at £194,273.
London Boroughs Show Contrasting Performance
While the capital overall lost value, some boroughs saw gains.
Newham topped the UK for annual house price growth, up £13,535 to £419,485.
Kingston-Upon-Thames also performed well, rising £12,697 to £597,586.
On the flip side, Kensington and Chelsea suffered the sharpest monthly fall, losing nearly £70,000, leaving average properties at £1,249,415.
The City of London saw a £50,983 drop, pricing homes at £662,920.
Annual Trends Offer a Brighter Perspective
Despite recent monthly declines, the annual picture is more optimistic.
Overall UK house prices rose roughly £7,000 over the past year, with the average home now worth £272,000.
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England: £293,000, up 2.0 per cent
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Wales: £209,000, up 2.7 per cent
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Scotland: £194,000, up 5.3 per cent
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Northern Ireland: £193,000, up 7.1 per cent
Yorkshire and the Humber led England for house price inflation at 4.5 per cent, while London saw the weakest annual growth, down 1.8 per cent.
Buyers Pause Ahead of Policy Changes
Many homeowners and potential buyers are holding off on decisions until the Budget clarifies housing policy, including possible changes to second-home rules and taxes on high-value properties.
Tom Evans, sales director at Purplebricks, said:
“A dip in house prices at this time of year isn’t unusual.
People are naturally waiting to see what the Chancellor announces, particularly around property taxes and housing supply.”
He added that despite caution, 2025 remains a strong year for the market and the sector is expected to end on a positive note.
Contracting Supply and Mortgage Relief
Robert Nichols, managing director at Purplebricks Mortgages, highlighted that limited housing supply continues to restrict activity, with some owners waiting for clarity on government policy before listing.
However, lower mortgage rates and a Bank of England base rate steady at 4 per cent are helping, alongside higher borrowing limits for first-time buyers.
These factors are keeping buyer interest alive despite the uncertainty.
Rental Market and Inflation Trends
The ONS reported that average UK private rents rose to £1,360 per month in October — a 5.0 per cent increase year-on-year.
Annual inflation in rents has slowed for ten consecutive months, easing some pressure on tenants.
Meanwhile, CPI inflation dipped from 3.8 per cent in September to 3.6 per cent in October, raising speculation that the Bank of England might cut rates soon, potentially reducing costs for mortgage holders.
Looking Ahead to the Budget
As the market steadies, all eyes are on the upcoming Autumn Budget.
Buyers, sellers, and investors are weighing potential policy changes, tax adjustments, and housing supply measures.
While monthly figures show some softness, experts remain cautiously optimistic that the UK housing market will remain resilient heading into 2026.
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