House price growth slows in October after September high

House price growth slowed in October, with valuations rising 0.1% month on month, according to an index by Nationwide.

The annual growth rate was 2.4% last month, easing back from a two-year high of 3.2% in September, the building society said.

The average UK house price in October was £265,738, according to the figures.

Robert Gardner, Nationwide’s chief economist, said: “Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the significantly higher interest rate environment.

“Providing the economy continues to recover steadily, as we expect, housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.”

Drive

Nationwide said “solid” labour market conditions, with low levels of unemployment and wage growth, had helped drive a steady rise in market activity and valuations this year.

The building society said chancellor Rachel Reeves’s decision to let the price at which buyers start paying stamp duty fall back to pre-2022 levels in the Budget would affect the timing of deals.

Mr Gardner said buyers would “aim to ensure their house purchases complete before the tax change takes effect.

“This will lead to a jump in transactions in the first three months of 2025 (especially March), and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes.”

Changes

However, the swings in activity are likely to be “less pronounced” this time, because the planned changes had been known about in advance.

Nathan Emerson, chief executive of Propertymark, said: “As the wider economy has become more settled, it’s encouraging to witness greater affordability and confidence flow through the housing market.

“With strong hints we may see a steady reduction in base rates implemented over the coming months, there is substantial scope to round the year with an upbeat tone to be carried forward into 2025.”