Rise in Halifax house prices by 0.3% in August, marking the third consecutive increase observed.

The UK property market is showing a mixed picture, with some regions experiencing growth while others face a decline, as economic uncertainty and potential tax changes take their toll.

According to Knight Frank, house price growth this year is expected to hover not far above zero, due to the supply still outweighing demand. However, there are signs of improvement, as Halifax's house price index shows house prices have risen for three months in a row. Amanda Bryden, head of mortgages at Halifax, attributes this to the 0.3% monthly uplift in prices.

The average cost of a UK house now stands at £299,333, with the typical home in Northern Ireland costing £217,082, and the average home in Scotland and Wales priced at £215,594 and £227,786 respectively. In Northern Ireland, average property values have increased by 8.1% over the past year, while in Wales, house prices rose 1.6% year-on-year.

However, the South West saw prices fall 0.8% over the past year, and residential property prices in the UK as a whole have generally seen a slight decline. According to Zoopla, UK house prices dropped by 0.1% in August, marking the first annual drop since January 2024. This downturn is influenced by economic uncertainty and potential tax changes, with regional variations such as lower prices in places like Colchester compared to London, where prices remain significantly higher.

The Bank of England reduced the base rate from 4.25% to 4% in August, which has helped to lower many competitive fixed-rate mortgage deals, with rates now below 4%. However, Swap rates, which heavily influence the fixed-rate mortgage market, are rising due to changes in money market expectations of where interest rates are heading.

Affordability remains a challenge for many house buyers, according to both lenders. The chancellor is considering a mansion tax for homes by introducing a capital gains tax charge on properties that sell for more than £1.5 million. Rumors about National Insurance being applied to rental income and a national property tax that would replace stamp duty have been circulating, adding to the uncertainty in the market.

The constant uncertainty from the chancellor is not helping the market, according to Aboody. If rumors and speculation about the Autumn Budget continue, it "won't help buyers and sellers commit to big decisions such as moving", according to Harris. If the Budget proceeds as planned, Zoopla predicts that UK house price inflation will continue in a range of 1.5-2% during the last few months of 2025. Zoopla also reports that property tax speculation is creating uncertainty for a third of home buyers.

In conclusion, the UK property market is facing a period of uncertainty, with economic factors and potential tax changes impacting house prices. However, there are signs of improvement, and some regions are experiencing growth. It remains to be seen how the Autumn Budget will affect the market and whether the uncertainty will continue.

Rise in Halifax house prices by 0.3% in August, marking the third consecutive increase observed.