UK annual house price growth halves in "subdued" market - Nationwide

UK annual house price growth halved last month, according to numbers from mortgage lender Nationwide showed Thursday, while there was a monthly decline again.

House prices rose 0.8% on-year in September, cooling markedly from a 1.6% hike in August. It was the weakest rate of growth since December 2025.

"Market activity and house prices have remained subdued in recent months, in part reflecting the uncertain economic backdrop. Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices, fanning inflation concerns. This in turn has led to mounting financial market expectations of bank rate increases, which has maintained upward pressure on the market interest rates which underpin mortgage pricing," Nationwide Chief Economist Robert Gardner commented.

Bank rate, the Bank of England's benchmark interest rate, was maintained at 3.75% last month.

UK house prices fell 0.2% in September from August, the fourth monthly decline in five months. In August, prices rose 0.2% from July. House prices had registered monthly falls in each of May, June and July ahead of the August bump.

Gardner added: "Nevertheless, there have been encouraging signs that higher energy prices are not feeding through to underlying price pressures. In particular, private sector wage growth has remained modest, which should give policymakers breathing space to assess the extent to which tighter policy is necessary to ensure inflation returns sustainably to target.

"Underlying affordability is improving, as house price growth has been well below earnings growth for some time. These gains have been only partially offset by higher mortgage rates. This suggests that activity should regain momentum in the quarters ahead providing the energy shock fades and confidence returns - especially if market interest rates fall back to pre-conflict levels."

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