House prices rose at their slowest rate since the start of 2024 in October, as property experts said the Budget failed to boost the UK’s beleaguered housing market.

The average house price in the UK rose by 0.5 per cent this month to £273,566, according to Nationwide, slowed from 0.8 per cent growth last month and 1.6 per cent in August.

The surging mortgage rates caused by the Iran war, combined with rising building costs and burdensome red tape, have bruised Britain’s housing market and the sector has criticised the government for its lack of support in the Budget.

Property experts at Nationwide said expectations that the Bank of England is set to hike interest rates are putting pressure on the market, pushing up the cost of mortgages and causing prospective buyers to delay decisions.

The Bank is under pressure to raise interest rates when it meets next week, and money markets have pencilled in as many as four rate hikes before summer next year.

Robert Gardner, Nationwide’s chief economist, said he expects to see “further softness” in the housing market in the coming months, as consumer sentiment continues to worsen.

The number of housing transactions in the UK fell by four per cent to 94,000 in September, HMRC said on Friday, in a further signal that the property market is losing speed.

Tom Bill, head of UK residential research at Knight Frank, said slowing price growth and falling mortgage approvals have meant “the toll of the Middle East conflict on the UK housing market is more obvious with each passing month”.

He said John Healey failed to set out any measures in his maiden Budget on Wednesday which would sufficiently tackle the challenges facing the housing market.

“The impact of rising mortgage costs eclipses any support measure announced in this week’s Budget, although the absence of major shocks from the Chancellor may produce a modest relief bounce in coming months,” he said.

Property experts and estate agents have criticised Healey for announcing a further two per cent tax hike on rental income, which they say will push up rents and reduce the number of houses available for rent.

Housebuilders had praised the Chancellor for introducing a new equity loan scheme to help buyers afford their first home, but the government has been criticised for not allowing buyers of London homes worth more than £650,000 to access the relief.

Jason Tebb, president of homes portal On The Market, said: “The Bank of England’s decision to hold interest rates throughout this year has helped affordability and confidence, but there are fears that rising inflation may finally force its hand at next week’s meeting, with the first rate rise this year.

“The Budget delivered targeted support for first-time buyers but there wasn’t much else of consequence to really boost activity in the market.”