House prices grew by 0.3% in October, according to Nationwide. That put price growth at 0.9% over the last three months and 2.2% over the last year, although the pace of house price growth is decelerating.

Activity remains stable, despite market apprehension ahead of the Budget on 26th November. Despite concerns that sales activity would stall, provisional estimates on the number of completed transactions in September were slightly higher than pre-pandemic levels for the same month. Furthermore, data from TwentyCI shows sales across price bands continuing at normal levels for September and October. There remains a potential risk of increased fall-throughs if there are changes to property taxation announced in this month’s Budget, which could cause buyers to reassess their future commitments. Prime markets, which face the greatest uncertainty from the Budget, have shown surprising resilience in terms of activity in September, but our agents have reported prices softening.

More positive economic data could see one more base rate cut before the end of the year. Inflation held steady at 3.8% in September and some mortgage lenders have made small cuts to rates. The Bank of England Monetary Policy Committee narrowly voted to hold the base rate at 4%, increasing the possibility of a rate cut in December.

With weaker buyer sentiment and lingering economic concerns, we are forecasting price growth of 2% in 2026. The biggest influence on price growth will come from the financial markets’ reaction to the Budget. We are forecasting real-term value growth from 2027 onwards driven by a strengthening economy, with the greatest longer-term growth in more affordable regions in the North. Our full analysis and mainstream sales and rental forecasts can be found here.

Rental growth is decelerating across most of the UK. According to Zoopla, annual rental growth was 2.2% in September, the same as in August. Some regions with lower rental growth, such as Scotland and Yorkshire and the Humber, both seeing 1.6% growth, have seen renewed, albeit marginal, acceleration. The Renters’ Rights Act received Royal Assent on 28th October, but the timescales for its implementation have yet to be announced. The NRLA has stressed that landlords will need at least six months to prepare for changes.

More localised house price data from July shows that areas with the greatest value growth were in Scotland and the North, chiefly Middlesbrough and North Lanarkshire with prices up 8.2% and 8.0%, respectively. Ceredigion saw the most significant price falls of -8.8%, followed by Kensington and Chelsea -5.1%.

Annual rental growth across the UK in September was 2.2% according to Zoopla, a slight deceleration from 2.5% in August. This aligns with RICS surveyors reporting a dip in tenant demand. Most regions saw slowing rental growth, except for Scotland, London, and Yorkshire and the Humber, which saw some of the smallest annual rental growth of less than 2%.

The Renters’ Rights Bill obtained Royal Assent on 28^th October. We are still waiting to hear how and when it will be brought into force. We estimate that 200,000 rental properties have left the market in the last 12 months, partially in response to policy changes. The National Residential Landlord Association reported, however, that landlord confidence rose across England and Wales in Q3, suggesting there is greater commitment from those remaining in the market.