"All eyes are now on next week's Budget - if the housing market gets off lightly, then we expect a rebound in demand and activity, but if the impact on consumer confidence is greater, then we could have a sluggish start to 2026"
- Richard Donnell - Zoopla
According to the latest data from the ONS, average UK house prices rose by 2.6% in the 12 months to September 2025, with the typical property now valued at £272,000. On a non‑seasonally adjusted basis, prices fell by 0.6% between August and September.
Regional performance
In England, the average price reached £293,000, up 2.0% annually but down 0.8% month‑on‑month. In Wales, the average stood at £209,000, up 2.7% compared with a decline of 0.8% in the month and in Scotland, house prices were up by 5.3%.
Yorkshire and The Humber saw the highest house price inflation in England, at 4.5%, up from 2.7% in August.
For London, the average hit £556,000, representing an annual fall of 1.8% and a monthly decline of 1.1%.
Property type & buyer status (England only)
Detached homes averaged £477,000, up 2.2% annually. Flats/maisonettes averaged £223,000, down 1.1% year‑on‑year.
First‑time buyers averaged £246,000, with an annual increase of 2.2% but a monthly fall of 0.8%.
Outlook
With the average home price at £272,000 and annual growth decelerating, house hunters may need to calibrate expectations. Interest‑rate pressures, regulatory developments and regional divergence will remain key, with the monthly drop of 0.6% emphasising the importance of local market conditions and timing.
Richard Donnell, Executive Director of Research at Zoopla, comments, "The last house price index data shows a slowdown in house prices and rental inflation as affordability pressures bite. This slowdown is expected to continue into 2026. More first-time buyers and lower migration for work and study are easing the pressure on rents, with rents for new lets rising at their lowest level for 4 years.
"Pre-Budget jitters are hitting housing market activity at the start of the home-buying process. Demand and sales agreed for homes priced over £500,000 are down by up to 9% on this time last year as buyers pause home-buying decisions. There are 350,000 homes where the sale has been agreed, moving towards completion, and some buyers of expensive homes will be nervous about possible changes to council tax for their new purchases."
"All eyes are now on next week's Budget - if the housing market gets off lightly, then we expect a rebound in demand and activity, but if the impact on consumer confidence is greater, then we could have a sluggish start to 2026."
Nathan Emerson, CEO of Propertymark, said, “It is encouraging to see equity rising again as this signals a return of buyer confidence and renewed momentum in the market. However, while higher values can reflect underlying strength, they also underscore ongoing affordability challenges and the limited supply of homes.
“To translate this momentum into long-term stability, it would be much welcomed to see the UK Government work closely with the industry to support sustainable growth, ensuring that more people can realistically access home ownership, rather than simply driving prices higher.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says, "Everyone in the property world has been laser-focused on the Budget – it’s felt like a marathon getting to this point. And while the wait hasn’t brought the market to a standstill, it has absolutely created hesitation. Over the past few weeks, we’ve seen noticeably fewer market appraisals, simply because sellers want to know what is coming before making a move.
"That pause now feeds directly into reduced stock for the New Year, which is when the market normally builds momentum. The real message right now is that the Budget hasn’t just shaped sentiment – it has shaped supply."
Mark Harris, chief executive of mortgage broker SPF Private Clients, comments, “With inflation easing to 3.6 per cent in October, this suggests prices have peaked and are now on a downwards trend. Swap rates, which underpin the pricing of mortgage rates and have been rising in recent days, were little changed this morning as inflation moved in the expected direction.
“However, the inflation figures have strengthened the likelihood of an interest rate cut from 4 per cent at the next meeting of the Bank of England in December, which will be welcome news for borrowers.
“With activity in the housing market subdued as buyers and sellers wait to see what the budget holds, lenders are launching some really competitive sub-4 per cent mortgage rates in an effort to boost business before the end of the year."
"It is worth locking into one of these cheaper fixed-rate mortgages if you are due to remortgage in the next six months, as there is still quite a bit of volatility, particularly with regard to the forthcoming budget. If, by the time you come to take out your mortgage, rates have fallen, you can switch to a cheaper rate but if rates rise, you will be glad you fixed when you had the opportunity."
