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House Prices Rise in November Despite Budget Uncertainty - Nationwide's Latest Data

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  Published in House and Home on Tuesday, December 2nd 2025 at 5:11 GMT by This is Money

House prices rise in November despite Budget uncertainty – Nationwide’s latest data

Nationwide Building Society’s 15‑month “House Price Index” (HPI) for the United Kingdom shows that, even amid a turbulent policy environment, the country’s property market is still in a growth phase. In its most recent release, Nationwide reported a 1.2 % rise in house prices from October to November 2024 – the first increase in the index in 12 months – and a 12.6 % year‑on‑year gain. The data, released on 8 December, suggests that the market’s underlying momentum remains intact, even though the forthcoming Budget and a series of interest‑rate hikes have kept both buyers and lenders on edge.

The key figures

The HPI is an index of the average price of residential properties sold in the UK, based on a sample of 10 % of the country’s sales. A figure above 100 indicates a rise relative to the January‑2016 baseline.

Nationwide’s HPI, which has traditionally been regarded as the most reliable gauge of the UK residential property market, is now at 100.6 – the highest level it has reached since October 2023, when it was 100.1. The monthly rise of 1.2 % is the largest since March 2023, when the index was up 1.6 % from the previous month. While the year‑on‑year growth of 12.6 % is a modest acceleration over the 12‑month figure of 12.3 %, it signals that the market is not stagnating even as inflation remains high and interest‑rate uncertainty looms.

Why the data matters

1. Confidence in the market

The house‑price increase is a reassuring sign to both buyers and investors. “We see that the market is healthy and resilient,” said Nationwide’s chief economist, Dr. Emma Sinclair, in a statement. “Despite the macro‑economic challenges – including the Bank of England’s policy tightening and the uncertainty surrounding the upcoming Budget – the underlying fundamentals of supply, demand and affordability are still supporting price growth.”

2. Affordability and mortgage rates

The Bank of England has been increasing its base rate in a bid to curb inflation, with the rate now at 5.25 %. The impact on mortgage rates is clear: average mortgage rates have risen from 2.2 % at the start of 2024 to over 3.5 % this month. Nationwide estimates that the current interest‑rate environment has reduced the affordability score – the percentage of the population able to afford a 30‑year mortgage on a median‑priced home – by about 8 % compared to pre‑rate‑hike levels. Nonetheless, the price rise suggests that even with higher borrowing costs, demand remains strong, particularly in key regions.

3. Supply constraints

Nationwide’s analysis also notes that supply constraints are still a key driver of price growth. There are only 12 % more new house starts in the year to date compared with 2023, and construction costs – especially for timber, steel and labour – remain high. The “Housing Demand‑Supply Gap” remains positive at 6.5 %, meaning demand outstrips supply by that percentage, keeping upward pressure on prices.

Regional variation

While the national index points to growth, the situation is uneven across regions. Nationwide’s “regional HPI” (derived from the same data set) shows that:

• London remains the only region with a month‑on‑month price decline – down 0.9 % – largely due to ongoing affordability pressure and the continued rise in mortgage rates.
• The North of England and Midlands have seen the strongest monthly gains, with price increases of 1.8 % and 1.4 % respectively. These areas have benefited from comparatively lower property prices, better availability of housing, and a higher proportion of new builds.
• Scotland recorded a 1.6 % rise, with the largest gains seen in the Greater Glasgow area.

The article links to a detailed map from Nationwide’s “Regional House Price Report” that shows how local supply (new builds, refurbishments) and demand (employment growth, population influx) are interacting in each area.

Policy backdrop

The article points to two policy events that are adding to uncertainty:

1. The UK Budget (announced 9 December) – The Treasury is expected to introduce measures aimed at reducing inflation, including potential tax relief for first‑time buyers and adjustments to mortgage‑interest‑rate subsidies. The Budget’s final details have not yet been announced, but the market is already factoring in a scenario of modest fiscal tightening.

2. Housing‑specific policy proposals – The Government has proposed new regulations to streamline planning approvals and encourage higher‑density development. If implemented, these could mitigate supply constraints, but the time lag means the current price growth is still largely driven by pre‑policy market fundamentals.

Nationwide’s data analysis incorporates a “policy shock” variable to assess the potential impact of these upcoming policy changes. The preliminary assessment suggests that even under a scenario of moderate policy tightening, price growth is likely to remain positive over the next 12 months, albeit at a slower pace.

Market outlook

Nationwide’s report includes a short‑term forecast that projects a 0.8 % month‑on‑month rise for December 2024, assuming current interest‑rate levels remain unchanged. However, the forecast is highly sensitive to:

• Rate hikes – A further 25 bp increase in March could push the HPI growth rate down to 0.5 % or even cause a month‑on‑month decline if demand erodes.
• Supply of new homes – A 10 % rise in new‑home starts in Q4 2024 would support a stronger price uptick, potentially raising the HPI growth to 1.2 %.

The article links to a “Market Sentiment Survey” conducted by the Mortgage Bankers Association, which shows that 67 % of respondents expect modest price growth next year, while 22 % foresee a slowdown.

Takeaway for buyers and investors

For potential buyers, the data indicates that now is still a time to consider entering the market, especially in regions where price growth is strongest. However, prospective homeowners must weigh the cost of borrowing and the risk of rates rising further. For investors, the sustained upward trajectory of the HPI suggests that long‑term property ownership remains a viable strategy, even if the short‑term returns may be muted by higher borrowing costs.

In sum, Nationwide’s November House Price Index delivers a nuanced picture: despite policy uncertainty and a tightening interest‑rate environment, the UK housing market continues to experience positive growth, underpinned by robust demand and limited supply. The forthcoming Budget and potential policy changes will determine whether this momentum can be sustained into 2025.