House prices fell in September
12:02 AM, 1st October 2026, 18 hours ago
UK house prices fell by 0.2% in September, reversing August’s rise, Nationwide reveals.
The average price dropped from £275,465 to £274,251, with annual growth halving from 1.6% to 0.8%.
That’s weakest rate since December 2025.
Meanwhile, four regions recorded annual price falls in the third quarter, with East Anglia seeing the largest decline at 0.7%.
Mortgage rates and affordability
Nationwide’s chief economist, Robert Gardner, said: “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.”
He added: “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.”
Regional house price falls
East Anglia’s annual decline of 0.7% in the three months to September was followed by falls in the East Midlands, South West and Outer Metropolitan region of 0.5%, 0.3% and 0.2% respectively.
Across Southern England, prices were down 0.1% on a year earlier, with London the only southern region to record an increase.
The North West led England’s regions with annual growth of 3.9%, unchanged from the previous quarter.
Northern Ireland remained the strongest performer across the UK, although its growth slowed to 5.9% from 8.6%.
Flats trail other homes
Annual price growth slowed across every property type in the third quarter.
Terraced homes recorded the largest increase at 1.8%, while flat prices were essentially unchanged from a year earlier.
The gap stretches back to the start of 2020, with the value of a typical flat rising by 14%, against 31% for a semi-detached home.
Mr Gardner attributed part of that difference to London’s weaker performance compared with the wider UK, since flats account for a much larger proportion of the capital’s housing.
Property sector reaction to Nationwide’s HPI
Tom Bill, Knight Frank‘s head of UK residential research, said: “House prices are stalling as the impact of rising mortgage rates takes its toll on demand, a pattern we expect to continue in the final three months of this year.
“Mortgage approvals fell 14% against the five-year average in August, which means transaction numbers will also increasingly feel the squeeze.
“The outlook beyond 2026 depends on how the unpredictable Middle East conflict unfolds and what property-related measures Chancellor John Healey announces in the Budget.”
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “Higher borrowing costs and inflation, as well as plenty of choice with the prospect of more to come, are compromising confidence in an already-nervous market. That is to say nothing of the impact of the budget as the date looms larger.
“The result is buyers are negotiating harder, especially for flats, to build in sufficient headroom to weather any further financial storms.”
Nathan Emerson, Propertymark‘s CEO, said: “As the economy continues to face periods of uncertainty and fluctuation, it is sadly unsurprising that the effects are increasingly being felt across the housing market.
“With the Autumn Budget now only weeks away, there will be close attention on whether the UK Government introduces measures that can provide greater certainty for those looking to buy or sell.”
