UK house prices rose by just 1.3% in the 12 months to September, marking the slowest annual increase since April 2024, according to new data from Halifax released on Tuesday. The housing market remained under pressure from economic uncertainty and speculation over new property taxes.
On a monthly basis, prices fell 0.3% from August, surprising analysts who had forecast a 0.2% monthly increase and an annual rise of 2.2%, according to a Reuters poll.
In comparison, August data showed a 2.0% annual gain and a 0.2% monthly rise.
Economic uncertainty weighs on housing market
Halifax noted that house price growth has slowed significantly this year compared to the second half of 2024, when values were climbing 4% to 5% annually. The slowdown reflects growing concerns over the economy and potential tax hikes as Finance Minister Rachel Reeves prepares her November budget.
Despite the weaker data, Amanda Bryden, head of mortgages at Halifax, said:
“Although the broader economic outlook remains uncertain, with affordability gradually improving, we continue to expect modest growth through the rest of the year.”
Economist Ashley Webb of Capital Economics added that the latest numbers align with other signs of cooling demand. High borrowing costs, a slower jobs market, and speculation about tax rises have all dampened buyer sentiment.
“If new taxes are introduced in the budget, real household disposable incomes could fall further, putting additional pressure on the housing market in 2026,” Webb warned.
Regional differences: London lags, Northern Ireland leads
Regionally, London house prices rose 0.6% year-on-year, while Northern Ireland recorded the strongest growth at 6.5%, according to Halifax.
Meanwhile, rival lender Nationwide reported last week that UK house prices rose 0.5% in September, pushing annual price inflation to 2.2%, slightly above Halifax’s estimate.
