Bank’s chief economist says Budget’s council tax surcharge ‘unlikely’ to hit market
The average price of a home in the UK rose last month while year-on-year inflation softened, according to Nationwide.
The bank’s latest house price index showed annual house price growth in November stood at 1.8%, down from 2.4% in October.
Month-on-month, house prices were up 0.3%, with the average price (not seasonally adjusted) standing at £272.998 in November.
Robert Gardner, chief economist at Nationwide, said that the market had remained “fairly stable” in recent months, which he said indicated resilience given the “backdrop of subdued consumer confidence and signs of weakening in the labour market”.
He noted particularly that mortgage rates were more than double the level they were before covid struck and that house prices were close to all-time highs.
Gardner said changes to property taxes in the Budget were “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,” he said.
However, he said the increase in tax on income from properties could “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,” he said.
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