UK house prices grow at slowest pace in two years as mortgage rates rise

UK house prices rose by just 0.5% in the year to October, their slowest annual growth in more than two years. The slowdown matters because higher mortgage costs are discouraging buyers and putting pressure on the outlook for property prices.

Nationwide said the average UK home cost £273,566 in October, unchanged from September, when annual growth was 0.8%. Average five-year fixed mortgage rates reached 5.99%, while two-year rates stood at 5.97%; economists linked rising borrowing costs to bond-market volatility and inflation concerns. The government’s £4.7bn first-home scheme may offer some support, but analysts expect prices to remain subdued.