Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm.
The latest Halifax House Price Index shows that UK property values grew by only 0.7% year-on-year in November.
The market has moved away from the sharper declines seen in late 2023 but the recovery remains gradual, uneven and sensitive to broader economic conditions.
The London market tells its own story. Average house prices have declined in recent months, as mortgage servicing costs still absorb a significant share of household income.
The Autumn Budget adds an additional layer of complexity. The surcharge on high-value properties will disproportionally impact London (where more properties are valued at over £2m), potentially discouraging purchases of luxury homes and dampening price growth in prime locations.
A 2% rise in tax on rental income will have some impact on the buy-to-let market as landlords face a squeeze on their margins, but this is unlikely to drive any significant downturn in house prices.
However, this could have a negative effect on renters — with landlords facing increased costs, they could look to pass this onto renters or refrain from investing in rental properties, with both outcomes ultimately leading to increased rents.
First-time buyers remain active, particularly in regions where price corrections over the past two years have created more accessible entry points. Higher borrowing costs compared with the pre-2022 norm continue to limit the pace of growth, keeping price inflation relatively contained. However, the Budget will not have done anything to slow this market — the stamp duty relief that many hoped for was not forthcoming, but no increase means there’s no further harm done.
As a result, price growth is likely to remain moderate across the country, with national house price inflation edging up only slowly through 2026. For most households, the Budget’s biggest influence will come indirectly through broader economic conditions, particularly real income trends.
"On the plus side, interest rates are likely to be cut in December, providing a timely Christmas present for mortgage-owners as we head into 2026."
