19 November 2025
If you are covering the latest UK government House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“Today’s figures show that the housing market is still on a very gentle upward path in cash terms, but the heat continues to come out of the recovery. Average UK house price inflation slowed to 2.6% in the year to September, down from 3.1% in August, and the average home is now valued at £272,000, which is only around £7,000 more than a year ago. At the same time, prices fell by 0.6% on the month on a non seasonally adjusted basis and by 0.2% after seasonal adjustment, which underlines that momentum is softening as we move through the autumn and into the quieter winter period.”
“Crucially, even though nominal prices are still rising year on year, they are not keeping pace with inflation, which was running at 3.8% in September and has only just eased to 3.6% in October. In real terms, house prices are therefore still drifting lower, which chips away at some of the pandemic and ultra low rate froth but does little to make housing feel genuinely affordable for would be buyers. Many households are still looking at much higher monthly mortgage payments than they would have faced previously, even if the headline price of the property has not moved dramatically.”
“For buyers, the good news is that the inflation data this morning gives the Bank of England a little more comfort that it is on the right path and that opens the door to further rate cuts over time. Markets are already pricing in lower Bank Rate through 2026, and that is feeding into slightly more competitive fixed rate mortgages, particularly for those with larger deposits. However, with inflation still some way above target and the economy looking fragile, the Bank is unlikely to deliver rapid or dramatic cuts. As a result, we should expect mortgage rates to grind lower rather than collapse, and for affordability tests to remain a real hurdle, especially for first time buyers and those looking to trade up.”
"Ahead of the Budget, there is also a degree of uncertainty about potential tax or policy changes, which may see some would be movers sit on their hands until the Chancellor has set out her plans. For now, though, today’s figures should reassure existing homeowners that prices are broadly holding up, while giving prospective buyers a little more breathing space as inflation and, in time, interest rates edge down. Anyone coming off a cheap fixed rate in the next year should speak to an adviser early to understand their options, as modestly improving rates can make a meaningful difference to monthly repayments in what is still a very tight affordability environment.”
