UK house prices dip in October amid Budget rumours, official data show
ONS data show a 0.1% monthly decline, led by London; regional differences persist as buyers weigh policy uncertainty and mortgage costs
House prices in the United Kingdom fell 0.1% in October, the latest monthly move, as rumours of tax changes in the Autumn Budget weighed on housing activity. The average price for October stood at £270,000, while annual price growth cooled to 1.7% after a 2% pace in the year to September, the Office for National Statistics said.
London led the regional declines, with prices down 1.9% in October and the typical capital home now worth £547,468, about 2.4% lower than a year ago. The dip in London contrasts with more resilient pockets elsewhere as buyers respond to higher mortgage costs and shifting affordability.
Across the rest of the country, the picture was mixed. The North East registered a 1.3% monthly uptick in October and has posted about 5% price growth over the past year. Wales also posted a monthly increase of around 1.1%. In terms of property types, flats continued to underperform. The average price of a flat fell to £192,892, 2.6% lower than a year ago, and in London flats declined by about 5.1% year-on-year to around £427,689. By contrast, the value of a typical semi-detached house rose about 4% year-on-year to roughly £275,656.
Analysts attributed the divergence to regional factors and affordability pressures. Jason Tebb, president of OnTheMarket, said the overall UK picture masks sharp contrasts, with London values contracting as supply grows and buyers face higher mortgage rates and living costs. He noted that the capital’s weakness reflects the combination of greater supply, reduced demand and stretched affordability compared with other regions.
Looking ahead, some market watchers see the potential for a rebound as policy and rates evolve. Jonathan Hopper, a buying agent at Garrington Property Finders, said buyer sentiment has improved since the Budget and that prices could begin to rise again in the new year, particularly if borrowing costs continue to ease and inflation continues to drift downward.
Industry watchers also focus on the Bank of England, which had been expected to cut interest rates from 4% to 3.75% in the near term. A rate reduction could translate into lower mortgage costs and support activity, though the exact path of rates remains uncertain as policymakers assess inflation and growth data. As such, buyers and lenders are watching for policy clarity that could underpin a broader uplift in activity next year.