UK house price growth slows to weakest pace since January 2024

Overview

Updated 1 hour ago

British house prices were flat in October and annual growth slowed to 0.5%, the weakest since January 2024, according to Nationwide. The average five-year fixed mortgage rate rose to 5.99%, the highest in three years, as markets bet on a Bank of England rate rise.

The chain runs from the Middle East to British high streets. The US-Iran conflict that began in late February pushed up energy prices and led investors to price in rate rises. Those expectations lifted the swap rates behind fixed mortgages, weakening demand just as more homes came to market.

Why it matters

If mortgage rates keep climbing, buyers lose purchasing power and sellers face longer waits and lower offers.

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Key Indicators

0.5%

Annual house price growth

Nationwide's measure for October, down from 0.8% in September.

0.0%

Monthly price change

Prices were flat month on month after seasonal adjustment.

£273,566

Average UK house price

Nationwide's non-seasonally adjusted average for October.

3.75%

Bank of England Bank Rate

Held at 3.75% since December 2025; most economists expect a rise to 4%.

5.99%

Average five-year fixed mortgage rate

Moneyfacts data for late October, the highest in three years.

35%

Homes in postcodes with annual price falls

Zoopla estimate for September, up from 12% a year earlier.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Robert Gardner

Chief Economist, Nationwide Building Society

Author of the October house price commentary

Ashley Webb

Economist, Capital Economics

Expects house prices to fall further

Organizations Involved

Nationwide Building Society

Mortgage lender and house price index publisher

Publishes the monthly index central to this story

Britain's largest building society and the publisher of a long-running monthly house price index.

Bank of England

Central bank

Sets the Bank Rate that drives mortgage pricing

The UK's central bank, which sets interest rates to target inflation.

Office for Budget Responsibility

Fiscal watchdog

Cut its house price forecast after the Autumn Budget

The independent body that produces official economic and fiscal forecasts alongside the Budget.

Capital Economics

Economic research consultancy

Predicts further price falls

A London-based macro research firm whose analysts comment on UK housing and rates.

Timeline

February 2026 October 2026

5 events Latest: 3 days ago

Tap a bar to jump to that date

October 2026
Nationwide reports 0.5% annual growth
Latest Data

Annual house price growth slows to its weakest since January 2024; prices are flat month on month.
3 days ago
OBR cuts house price forecast
Forecast

The fiscal watchdog lowers its 2026 growth forecast to 2.1% after the Autumn Budget.
4 days ago
September 2026
Mortgage approvals fall to lowest since December 2023
Data

Bank of England data show fewer mortgages approved for house purchase in September.
September 2026
April 2026
Annual house price growth peaks at 3.0%
Data

Nationwide records the high point of the year before growth begins to fade.
April 2026
February 2026
US-Iran conflict begins
Geopolitical

The conflict pushes up energy prices and leads markets to abandon bets on Bank of England rate cuts.
February 2026

Scenarios

Bank of England raises Bank Rate to 4%

Likely Resolves by Nov 6, 2026

Discussed by: Reuters poll of economists; market pricing reported by Nationwide

Most economists expect the Monetary Policy Committee to raise Bank Rate to 4% from 3.75% at its November meeting, the first increase in three years. A hike would keep upward pressure on mortgage rates and reinforce the cooling in buyer demand.

UK house prices fall year-on-year by spring 2027

Possible Resolves by Q1 2027

Discussed by: Ashley Webb of Capital Economics

Capital Economics expects mortgage rates to keep rising and prices to fall further in coming months. If correct, Nationwide's annual growth rate would turn negative, echoing the 2022-2023 downturn.

Housing market regains momentum as energy shock fades

Unlikely Resolves by Q2 2027

Discussed by: Robert Gardner of Nationwide

Gardner argues that once the energy shock fades, solid employment, rising real incomes and improved affordability should support a rebound. That would require mortgage rates to stabilize and buyer enquiries to recover.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

September-October 2022

UK mini-budget mortgage shock (2022)

The Truss government's unfunded tax cuts sent gilt yields sharply higher and prompted lenders to pull mortgage products. Average fixed mortgage rates jumped within weeks.

Then

The Bank of England intervened in the gilt market, the mini-budget was largely reversed and the prime minister resigned.

Now

Mortgage pricing tracked the funding market ever more closely, and house price growth turned negative in 2023.

Why this matters now

It shows how fast a shift in rate expectations reaches household mortgage costs, the same channel now at work.

1988-1995

Late-1980s boom and early-1990s housing slump

A credit boom and tax incentives pushed house prices up fast in the late 1980s. When interest rates were raised sharply, prices fell and many borrowers were left in negative equity.

Then

Prices fell through the early 1990s and transactions stalled.

Now

It took years for prices to recover, and negative equity shaped household finances for a decade.

Why this matters now

A reminder that rate-driven housing downturns can outlast the rate spike that caused them.