November saw a softening in the rate of annual house price growth to 1.8%, from 2.4% in October, according to the latest Nationwide house price index.
However, prices increased by 0.3% month-on-month, after taking account of seasonal effects.
Robert Gardner, Nationwide's chief economist, said: “The housing market has remained fairly stable in recent months, with house prices rising at a modest pace and the number of mortgages approved for house purchase maintained at similar levels to those prevailing before the pandemic.
“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all-time highs.
“The changes to property taxes announced in the Budget are unlikely to have a significant impact on the housing market. The high value council tax surcharge, which is not being introduced until April 2028, will apply to less than 1% of properties in England and around 3% in London.
"The increase in taxes on income from properties may dampen the supply of new rental properties coming onto the market. Rental supply has been constrained for some time, with the potential for this to maintain upward pressure on rental growth, which has been running at all-time highs in recent years.
“Looking forward, housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect. Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters.
“This should support buyer demand, especially since household balance sheets are strong. Indeed, in aggregate, the ratio of household debt to disposable income is at its lowest for two decades.”
Karen Noye, mortgage expert at Quilter, commented: "This reflects a market that has been treading water. Most of November was dominated by Budget rumours and many buyers simply waited to see what the Chancellor would do. The confirmation of a mansion tax will matter most to the top end, but the speculation alone about what might have appeared in the budget had already stalled decisions.
"With the Budget out of the way, the focus now shifts back to interest rates. Inflation is easing and markets think a December rate cut is a possibility. Even if the Bank of England holds off until the new year, expectations of lower rates have already fed into swaps and lenders have started to trim fixed rate mortgages. Any fall in borrowing costs is crucial for first-time buyers who are still facing the toughest affordability conditions in years.
"Former owner occupiers with more equity behind them are in a slightly stronger position, but this group also slowed activity during the Budget standstill. Confidence will depend heavily on how mortgage rates behave over the next few weeks.
"New build prices remain softer as developers continue to use incentives to secure sales, while existing homes have held their ground more firmly, albeit with lower transaction volumes.
"Overall, this is still a market that is stable but subdued. The removal of Budget uncertainty helps, but buyers will only return in greater numbers if mortgage rates continue to drift down. If inflation keeps falling and lenders sharpen pricing further, we could see activity pick up in the new year, but a rapid rebound is unlikely."
Jonathan Hopper, CEO of Garrington Property Finders, added: “Nationwide’s data doesn’t yet reflect the uncorking of demand seen since the Budget.
“Over the past week, parts of the market have been enjoying an Indian summer - a flicker of warmth and a rapid thaw following months of slowing transaction numbers and flatlining or falling prices.
“But so far we’re in reset territory rather than a full-on relief rally. Prospective buyers who paused their plans amid the swirl of pre-Budget leaks and rumours have emerged from hiding to find a market blessed with abundant stock and many sellers competing hard on price.
“Above all there is a palpable sense of relief that the most punitive tax rises that the Chancellor was reportedly considering were left out of last week’s Budget.
“Of those that were left in, the mansion tax will disproportionately hit London - 3% of all homes in the capital will have to pay it according to Nationwide - and this will create some distortions in pricing at the £2m mark.
“While it will prove an annual annoyance for many people whose homes have risen rapidly in value over the past decades, it may be little more than a speed bump for very wealthy buyers.
“Of greater concern is the increase in tax on landlords’ rental income, which will prompt more small landlords to sell up - adding to the glut of homes for sale in some areas and driving down prices further.
“But with the Bank of England widely expected to cut interest rates again this month, the prospect of cheaper mortgages coupled with property prices that softened substantially over the past few months could propel the market into a flying start to 2026.
“Many movers chose to put things on hold in the second half of 2025 and the shackles will come off in January. Property portals tend to see a surge in window shopping from prospective buyers on Boxing Day - this year it may start before the Christmas turkey is even cold.”
