Annual UK house price growth halves as mortgage rates rise – business live
Developed over time first seen 2 hours ago
UK house price growth halved in September as rising mortgage rates and economic uncertainty weighed on the market. Nationwide reported a 0.2% monthly fall, leaving annual growth at 0.8%, its weakest since December 2025.
The average UK home cost £274,251, and the figures were weaker than economists had expected: they had forecast no monthly change and 1.3% annual growth. Average two-year and five-year fixed mortgage rates were both above 5.9%; prices rose fastest in Northern Ireland, up 5.9% over the year, while East Anglia recorded a 0.7% annual fall.
- UK house prices fell 0.2% in September.
- Annual growth slowed to 0.8%.
- Mortgage rates above 5.9% are weighing on demand.
Full account
Annual UK house price growth slowed to 0.8% in September, half August’s 1.6% rate, according to Nationwide. Prices fell by 0.2% during the month after seasonal adjustment, bringing the average price to £274,251. Annual growth was at its weakest since December 2025.
The figures suggest that higher borrowing costs are weighing on a housing market already subdued by economic uncertainty. Nationwide’s chief economist, Robert Gardner, linked the rise in mortgage rates partly to the conflict in the Middle East: higher energy prices have raised concerns about inflation and increased financial market expectations that the Bank of England will raise interest rates. Mortgage lenders’ pricing is influenced by those market rates.
The pressure is visible in current mortgage offers. Moneyfacts reported that average rates for both two-year and five-year fixed residential mortgages had risen above 5.9%. The two-year average was at its highest since July 2024, while the five-year average was at its highest since October 2023. Gardner said affordability had nevertheless improved in one respect, because house prices had grown more slowly than earnings for some time. He suggested that housing activity could recover if the energy shock eased and confidence returned.
The national figure conceals marked regional differences. Prices in Northern Ireland rose by 5.9% over the year, the strongest growth reported by Nationwide, while East Anglia recorded a 0.7% fall. The September reading was also weaker than economists surveyed by Reuters had expected: they had forecast no monthly change and annual growth of 1.3%. The outlook remains sensitive to energy prices, inflation and the path of mortgage rates.
Where outlets differ
The live business report emphasises that Nationwide’s figures missed economists’ forecasts and places them alongside the day’s scheduled manufacturing data. The second report gives more attention to the Middle East conflict, expectations for future Bank of England rate rises and Gardner’s view that slower house price growth has helped affordability. The two reports agree on Nationwide’s headline figures and the regional contrast.