Key facts
- UK annual house prices rose 0.8% in September, the weakest annual growth since December 2025.
- Prices fell 0.2% month-on-month in September.
- The annual growth rate halved from 1.6% in August.
- The annual increase was below the 1.3% forecast by economists.
- Prime Minister Andy Burnham announced a new loan program for first-time buyers with a 2.5% deposit.
British annual house prices experienced their weakest growth since December 2025 last month, with a surprise 0.2% drop in September. Mortgage lender Nationwide Building Society reported that prices rose by 0.8% year-on-year, a significant slowdown from August's 1.6% increase and below the 1.3% forecast by economists. This marks the joint-fastest monthly pace of decline since May.
Robert Gardner, Nationwide's chief economist, attributed the subdued market activity and house prices to an uncertain economic backdrop, high geopolitical tensions, and upward pressure on energy prices fueling inflation concerns. While underlying price pressures may not be significantly affected by energy costs, investor expectations of a Bank of England rate hike have kept mortgage rates elevated. Financial markets anticipate a quarter-point rate increase in November and another in February.
In an effort to support the property market, Prime Minister Andy Burnham announced a new loan program for first-time buyers. This initiative will allow homebuyers with a 2.5% deposit to receive loans covering up to 20% of a property's value. Further details are expected to be released by finance minister John Healey in his upcoming budget.