UK house price growth slows to 0.5%, weakest since January 2024

Prices flatten as annual growth slows

The average UK home was valued at £273,566 in October, unchanged from September, according to Nationwide. Annual growth slowed to 0.5% from 0.8% in September, its weakest pace since January 2024. The October average also sits below the April peak of £278,880. Economists polled by Reuters had expected a monthly fall of 0.1% and annual growth of 0.6%, so the annual figure came in below that forecast. Robert Gardner, Nationwide's chief economist, linked the slowdown to an uncertain economic backdrop and said the market would stay soft in the near term.

“Forward-looking indicators suggest further softness in the near term.”

2026-09

0.8 %

2026-10

0.5 %

Data from the article text

Mortgage costs keep climbing

Moneyfacts put the average five-year fixed mortgage rate at 5.99% on Thursday, 29 October, with the average two-year rate at 5.97%. The Bank of England base rate has stayed at 3.75% since last December, but volatility in the bond market has pushed up the swap rates that set fixed-rate pricing. Bank of England data showed the average five-year fixed rate at 75% loan-to-value reached 4.98% at the end of September, its highest level since 2023. Mortgage approvals for September fell more sharply than expected, to their lowest level since 2023. Gardner said the war in the Middle East had fed inflation concerns and lifted expectations of higher interest rates.

Five-year fixed (Moneyfacts, 29 Oct)5.99%

Two-year fixed (Moneyfacts, 29 Oct)5.97%

Five-year fixed (Moneyfacts, 29 Oct)

5.99 %

Two-year fixed (Moneyfacts, 29 Oct)

5.97 %

Data from the article text

Budget support and the rate decision

Chancellor John Healey confirmed the £4.7bn Your First Home scheme in his first Budget on Wednesday, 28 October. From spring 2027, eligible buyers in England will be able to purchase newly built homes with a 2.5% deposit, supported by a government-backed equity loan covering 20% of the property's value. Tom Bill, head of UK residential research at Knight Frank, said rising mortgage costs outweigh any support measure announced in the Budget. Rob Wood, chief UK economist at Pantheon Macroeconomics, said the scheme could provide a modest boost to the market but expected prices to remain subdued next year. Financial markets are fully pricing in a quarter-point rise to 4% at the Bank of England's next decision, in the week of 2 November 2026.

Outlook for buyers and prices

Nationwide reported that surveyors see new buyer inquiries remaining weak, and that consumer sentiment dipped noticeably in October as households grew less confident about the economy and their own finances. Gardner expects the property market to stay under pressure until energy prices ease, and he sees a recovery once that happens.

“Once the energy shock fades, there are good reasons to believe the market will regain momentum.”

Ashley Webb, an economist at Capital Economics, said that with mortgage rates still rising, house prices are likely to fall further over the next few months. Bill said the Budget's lack of large shocks could bring a modest relief bounce in the coming months, but asking prices would need to reflect a much tougher financial landscape for buyers. The next test comes at the Bank of England's decision in the week of 2 November 2026, which markets expect to lift the base rate from 3.75% to 4%.