Weakest reported since December 2025, says Nationwide
UK annual house price growth halved to 0.8% in September, dropping from 1.6% in August and marking the weakest rate of growth since December 2025, according to the latest Nationwide house price index. Taking into account seasonal effects, prices were down 0.2% month-on-month.
Robert Gardner, Nationwide’s chief economist, said that despite the subdued picture, he was confident the market should pick up. “Underlying affordability is improving, as house price growth has been well below earnings growth for some time. These gains have been only partially offset by higher mortgage rates. This suggests that activity should regain momentum in the quarters ahead, providing the energy shock fades and confidence returns – especially if market interest rates fall back to pre-conflict levels,” he said.
Rising mortgage rates take their toll
Tom Bill, head of UK residential research at Knight Frank, seemed less confident, however. “House prices are stalling as the impact of rising mortgage rates takes its toll on demand, a pattern we expect to continue in the final three months of this year. Mortgage approvals fell 14% against the five-year average in August, which means transaction numbers will also increasingly feel the squeeze. The outlook beyond 2026 depends on how the unpredictable Middle East conflict unfolds and what property-related measures Chancellor John Healey announces in the Budget.”
Nathan Emerson, CEO at Propertymark, agreed that all eyes will be on the budget. “As the economy continues to face periods of uncertainty and fluctuation, it is sadly unsurprising that the effects are increasingly being felt across the housing market. Many consumers are taking a more cautious approach to their household finances, with affordability pressures continuing to influence decisions around buying and selling property.
“With the Autumn Budget now only weeks away, there will be close attention on whether the UK Government introduces measures that can provide greater certainty for those looking to buy or sell.”
