House price growth stalls in November – Jonathan Rolande

A look at borrowing costs, asking prices, and the number of sellers cutting their prices tells you most of what you need to know.

Nationwide reports that house prices were flat in October. Annual growth has slowed to just 0.5 per cent – the weakest since January 2024. The average home now costs £273,566. In fact, property seems to be about the only thing not affected by inflation.

Sellers have been busy cutting the price of more than 3,000 homes a day in September. That’s the highest monthly total since 2011.

Rightmove expects prices to finish the year somewhere between unchanged and 2% lower. Factor in that dreaded general inflation of around 3.5 per cent and even a standstill is a real-world reduction.

Remember, remember the 5th of November. It is the day the Bank of England is expected to increase the bank base interest rate from 3.75 per cent to 4 per cent.

Nothing is certain until the announcement, but the markets are putting the odds heavily in favour of a rise.

If rates do go up, any hope of house price recovery can be ruled out.

Mortgage costs are already stretching household budgets. Another increase will make some buyers think twice, reduce their offers or simply walk away. The property market relies on positive sentiment and that is in short supply.

Landlords have their own reasons to be fearful. From April 2027, tax on property income is due to rise to 24 per cent for basic-rate taxpayers, 44 per cent for higher-rate taxpayers and 49 per cent for additional-rate taxpayers.

Add mortgage costs, regulation and the general hassle of being a landlord, and buy-to-let is looking much, much less attractive.

Some will decide enough is enough and sell. That means more properties competing for buyers, adding further pressure to prices. Flats will feel this most.

Flats already have a tougher time of it. Lease terms, service charges and the cost of maintaining communal areas can put buyers off. Retirement flats are under particular scrutiny following ITV’s Tonight investigation into the sector.

Some families are finding themselves stuck with properties they cannot sell while still paying thousands in annual service charges.

One reported case involved an £11,000 annual bill for service charges and ground rent. That is a substantial amount to pay for a property you cannot get rid of that is falling in value.

Not every retirement flat is a problem, but buyers are right to ask more questions. A property that looks affordable on the asking price can become an expensive commitment once you factor in the lease, service charges, and future resale prospects.

November could bring a little more activity if interest rates stay put. However, flat prices, weak demand, thousands of daily price reductions and the prospect of higher interest rates at some point are hardly signs of a market ready to take off.

The days when sellers could name their price and expect someone to pay it are long gone.

Will the government act boldly to stimulate the market, if only to safeguard some of the one million jobs that directly rely on it? Time will tell.

Property expert Jonathan Rolande is one of the UK’s leading house market experts. For more information visit Rolande.Property.

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