UK house prices recorded their first annual fall since November 2023 in August, according to new data, with the market described by analysts as "subdued". The figures suggest a standoff between cautious buyers, wary of inflation's effect on mortgage costs, and sellers who feel they have already cut prices as far as they can, resulting in fewer sales and longer transaction times.

Industry experts noted that activity has begun picking up now the summer holiday period has ended, and that sellers setting realistic asking prices are seeing more movement. Mortgage brokers pointed to renewed volatility in Swap rates, which underpin mortgage pricing, driven by Middle East tensions and rising oil prices, though the Bank of England's steady interest rate stance this year has had a calming effect. Attention now turns to the Bank's meeting next week and the upcoming Budget, both seen as sources of potential further uncertainty, while first-time buyers are reported to be benefiting modestly from the price dip.