Official figures have revealed a slowdown in UK house price growth during October, with the capital experiencing a notable decline in property values as experts predict an imminent cut to the Bank of England base rate.
Regional Price Divergence Across the UK
According to the Office for National Statistics (ONS), annual house price inflation across the UK moderated to 1.7% in October, down from 2.0% in September. The average UK house price stood at £270,000 for the month.
The data highlighted significant regional variations. In England, the average price reached £292,000, marking a 1.4% annual rise. Wales saw a 1.5% increase to £211,000, while Scotland experienced stronger growth of 3.3%, taking average values to £192,000. Northern Ireland recorded a 7.1% annual jump to £193,000 for the third quarter of 2025.
Within England, the North East led with price inflation of 5.0%. In stark contrast, London's average house price fell by 2.4%, and the South West also saw a decline of 1.3%.
Expert Insight on Market Sentiment and Affordability
Amy Reynolds, head of sales at London estate agency Antony Roberts, commented on the capital's sensitivity. "In London, where affordability and sentiment are highly rate-sensitive, even small shifts in expectations can have an outsized impact on activity," she said.
Sarah Coles, head of personal finance at Hargreaves Lansdown, outlined the broader implications. "When house prices fall it affects wannabe downsizers who are relying on the equity in the home to supplement their retirement income," she noted. "It also dents the confidence of homeowners, who feel less well off, and may hold back on spending as a result."
Coles added that while this could spell bad news for the sluggish economy, first-time buyers and those moving up the property ladder may find reasons to celebrate.
Inflation Slowdown Fuels Rate Cut Expectations
The property data coincided with news that the Consumer Prices Index (CPI) inflation rate slowed to 3.2% in November, a larger drop than many economists forecast. This has solidified expectations that the Bank of England's Monetary Policy Committee will reduce the base rate at its meeting on Thursday.
Mark Harris, chief executive of mortgage broker SPF Private Clients, stated: "The likelihood of another quarter-point reduction in base rate at tomorrow’s meeting looks almost certain." He pointed to a growing range of sub-4% mortgage products already tempting borrowers, a trend expected to continue into the new year.
Financial planner Ian Futcher of Quilter said the inflation fall, combined with recent weak GDP data, positions the Bank to cut rates. "This would be welcome news for buyers, reinforcing confidence that mortgage rates will continue their gradual decline," he explained.
Advice for Buyers and Sellers in a 'Precision Market'
Nick Leeming, chairman of Jackson-Stops estate agency, emphasised the need for sellers to price competitively in a market defined by regional nuances. "For buyers, it is likely the Bank of England will reduce interest rates this week and fuel competitive mortgage offers, giving some more leverage and impetus to make their move in January," he said.
Leeming described the current conditions as the window buyers have awaited, with choice, leverage, and stability returning to their side, noting a sharp uptick in offers and exchanges already in early December.
In a separate but related release, the ONS reported that average UK private rents increased by 4.4% annually to £1,366 in November, though the rate of growth slowed from the previous month. Nathan Emerson of Propertymark attributed the ongoing upward pressure on rents to an "unhealthy imbalance between rental supply and demand."
