In October, UK house prices got to a new record, with an average of £293,999, according to Halifax. This amount is higher the previous high from June 2022. Although mortgage rates are still high and economic pressures are strong, the housing market has shown stability.
Amanda Bryden, head of mortgages at Halifax, said, “That house prices have reached these heights again in the current economic climate may come as a surprise to many, but perhaps more noteworthy is that they didn’t fall very far in the first place.
“Despite the headwind of higher interest rates, house prices have mostly levelled off over the past two and a half years, recording a +0.2% increase overall.”
How Does The Recent UK Budget Impact The Housing Market?
The UK government’s latest budget announced increased borrowing—estimated around £70 billion—to fund infrastructure and social projects. This higher borrowing level generally raises bond yields, which can, in turn, push mortgage rates higher.
The Bank of England recently took down its base interest rate to 4.75%. If inflation stays high or wages continue to go up, the Bank may consider more rate increases to help manage economic stability. Some lenders have already indicated that mortgage rates may remain elevated, which could stretch household budgets and affect housing affordability.
The budget also allocates funds for housing needs. About £5 billion has been set aside for affordable housing projects, with an additional £3 billion dedicated to private sector developers through loan guarantees. These efforts aim to expand the supply of homes, which could gradually help ease property price increases.
How Are Different Parts Of The UK Affected?
House prices across the UK are going up, with some areas prices growing faster than others. London is still the priciest area, with an average property price of £543,308. This is a 3.5% increase from last year.
Northern Ireland recorded the most growth, with prices going up by 5.9% to an average of £204,242. The North West of England follows, with an average of £235,587. Wales also saw a rise, with homes now averaging £225,543.
In Scotland, prices rose more modestly, with an average home price of £206,480, reflecting a 1.9% increase from the previous year. These regional trends show how demand, local policies, and economic factors shape property prices in distinct ways across the UK.
What Does The Budget Mean For First Time Buyers?
One positive the budget brings for first time buyers the UK making the mortgage guarantee scheme permanent, because this helps buyers enter the market with only a 5% deposit. This is so first-time buyers have more certainty when planning their purchases.
On the other hand, current stamp duty exemptions for first time buyers, which apply to properties up to £425,000, will revert to lower thresholds in March next year. This adjustment may increase costs for those looking to enter the market after that date, putting some added pressure on buyers planning to purchase sooner.
What To Consider When Running A Property Startup
Experts have shared their advice on when it comes to running a property, or proptech startup. Their insights are quite interesting. Here’s what they’ve shared:
Our Experts:
- Bart-Jan Leyts, CEO and Founder, Otamiser and AutoRank
- Nadeem Raziq, Head Of Tax, Provestor
- Guy Westlake, Chairman and Founder, Lavanda
- Liv Conlon, Founder, ThePropertyStagers.co.uk and StagerBoss
- Lee Travers, CEO, FinTech Investments
- Alex Back, Marketing Director, The Student Energy Group (TSEG)
Bart-Jan Leyts, CEO and Founder, Otamiser and AutoRank
“When launching a proptech startup, it’s essential to look beyond just financial projections and heavy business models. Investment is about finding the right people to join you — those who believe in your purpose and your vision. Starting a business is about selling a vision and hoping people will tune into that vision.
“Finding the right team is crucial because they’re the ones who will help bring that vision to life. In the proptech industry, where innovation and disruption are key, having a dedicated team and supportive investors can make all the difference. They provide not only the necessary resources but also the shared enthusiasm and commitment needed to navigate the challenges ahead.
“So, focus on assembling a team and attracting investors who are as passionate about your vision as you are — they’re the ones who will help propel your startup to success.”
Nadeem Raziq, Head Of Tax, Provestor
“I’m a property investor and I’m a property tax expert. We help hundreds of investors week-to-week and the shifting tax landscape is by far the biggest consideration for new investors. Getting tax wrong can sink the business case for many property investments.
“If you’re a higher rate tax payer, or you think you will buy more than one property, then I’d advise you start up a limited company. The tax-efficiencies mean they’re particularly useful for growing a portfolio, and using rental income to fund your next purchase. With a limited company you’ll be able to fund the purchase of your next property much sooner.
“Mortgage lenders look more favourably on applications from landlords with well structured limited companies. People who have a clear share structure and up to date company accounts are more likely to be approved.
“If you set up a limited company, you will need to file your accounts and tax returns annually. Keeping on top of your bookkeeping (expenses and income) is really important. Look for apps that are specifically designed for property investors as they will help you categorise your expenses according to the specific property tax rules. This keeps things tidy, and makes compliance and filing accounts and tax returns easier and quicker.
“Set your goals at the beginning. Are you doing this to earn another income, pass on an inheritance / legacy to family, or fund retirement? An accountant like Provestor will help you set a company up with this long-term goal in mind. It will give you flexibility to manage tax efficiently and avoid any unnecessary legal fees, such as those associated to adding children to your share structure.”
Guy Westlake, Chairman and Founder, Lavanda
“Proptech entrepreneurs need to be prepared for when their initial product doesn’t hit the mark as planned – and understand that’s okay and to be expected. What matters is your ability to learn quickly, understand the real needs of your target audience and iterate fast. So, stay hyper-attuned to customer feedback and be ready to make (potentially) radical changes at the drop of a hat in order to find product-market fit. You need to prepare to fail, and fail fast!
“But the greatest pitfall for aspiring proptech founders is setting out to solve a problem that doesn’t actually exist. I’ve lost count of the number of founders who have abandoned their City jobs to launch a proptech start-up, only to realise the industry doesn’t operate the way they thought and is not willing to embrace a change to their working processes. Real estate is one of the oldest industries there are, and has operated in the way it has done in many cases for hundreds of years for good reason – so setting out to become a ‘disruptor’ often sees entrepreneurs fall flat on their face. Deep industry knowledge is absolutely critical.
“Too many products are designed for an idealised version of the market, not one based in today’s reality. So, before building anything, founders need to truly immerse themselves in the industry, understand why it functions the way it does and identify meaningful solutions to genuine pain points. And don’t just look to solve the problem itself – follow the money. Ensure your target customer has the budget and buying power for your solution. If you’re selling SaaS to property managers who don’t have the funds to buy your product, then you literally have no market – no matter how brilliant the technology itself is.
“Post-launch, staying close to your customers is key. Rapid iteration and genuine responsiveness to feedback will help you find product-market fit faster. Be prepared for sales cycles to be longer and more hands-on than you maybe anticipated. Real estate can be quite slow to adopt tech – not because companies are uninterested, quite the contrary, but because actual internal ownership of technology procurement and budget is still often evolving, and lines of business are often constrained on both fronts. Often, you’ll need to guide customers through the process of understanding, justifying, buying and adopting new tools, so prepare to adapt your sales approach and growth metrics to reflect this.
“Ultimately, a successful proptech business requires a deep understanding of both the problem you’re solving and the market you’re entering. Those who thrive in this space are the ones who can iterate quickly, stay grounded in reality and solve real, immediate needs with agility and focus.”
Liv Conlon, Founder, ThePropertyStagers.co.uk and StagerBoss
“Before launching your business, you’ll need to identify the specific gap in the market that your business will fill. Does it address a real problem for property buyers, sellers or investors? If you can’t sum this up in one sentence, you aren’t being clear enough on what you offer.
“Make sure you invest in flexible and scalable technology from the beginning. This will allow your platform to grow with market demand without constant re-development.
“The property industry is heavily regulated; stay informed of compliance requirements and ensure your business adheres to them to avoid costly fines or delays.
“Develop partnerships with key stakeholders, including real estate agencies, lenders, and tech providers, to broaden your reach and enhance your service offering.
“Property markets fluctuate; prepare for downturns by building cash reserves and offering solutions that can withstand economic shifts.
“Finally, and this is my key point, establish your company as a trustworthy, knowledgeable entity through building a personal brand. This can be the founder (which is my recommendation) or someone in the company. They should create thought leadership content that consists of: educational content, lifestyle content and positioning content, such as podcast interviews, and PR etc.”
Lee Travers, CEO, FinTech Investments
“Tech Savvy, Not Tech Flashy: Adopt the right technologies. AI and blockchain sound cool, but don’t use them just for buzzword bingo—make sure they actually solve problems.
“User Experience is King (and Queen): If your platform isn’t intuitive, users will flee faster than tenants from a haunted house. Invest in slick design and seamless functionality.
“Guard the Goods (Data): Treat your users’ data like it’s the crown jewels. No one wants their sensitive info getting leaked—unless you’re aiming for a cybersecurity scandal.”
Alex Back, Marketing Director, The Student Energy Group (TSEG)
“In the competitive world of the PropTech sector, building a successful startup requires more than innovative ideas – it demands a clear strategy, strong technology choices, and a resilient team culture, just like reflected at TSEG.”
“Define your objectives – success starts with a clear objective and a deep understanding of your target market. Founders must be clear on the specific problem they aim to solve. At TSEG, our focus has been on managing student utility bills effectively – a critical issue, especially during the recent energy crisis. Choosing a niche where we could make an impact, rather than competing with established players was essential for our growth.
“Prioritise the team – It’s also important to build a team aligned with your vision. We started with a team of eight, and today, we’re seventy strong. As we’ve grown, we’ve focused on hiring the right people who share our values.
“Do your research – using cutting edge technology will help you stay competitive. It’s equally important to do your research, partner with the right people and provide solutions to enhance customer pain points. We built our own bespoke software, but don’t feel like you must do it all yourself.
“Funding – cash flow management is vital when growth can be rapid. Funding isn’t just about the cash; it’s about building relationships that can accelerate growth.
“Startups advantage – startups often have an advantage over established companies because they can pivot and innovate more quickly. Think of it as the difference between a speedboat and an oil tanker: while giants like Microsoft may need time to change course, startups can adapt and refine their strategies quickly. Embrace this agility—test, learn, and don’t be afraid to adjust. At TSEG, our willingness to test and even fail has led to a stronger, more customer-centric product.”
