British annual house price growth slowed to 0.5% in October, its weakest pace since January 2024, as rising market interest rates dampened appetite from buyers, according to monthly figures from mortgage lender Nationwide Building Society released on Friday, 30 October.
House prices were unchanged from the previous month on a seasonally adjusted basis, after a downwardly revised 0.3% fall in September, while the unadjusted average UK home price stood at £273,566, compared with £274,251 the previous month.
FAKTA
- Annual growth: 0.5% in October 2026, down from 0.8% in September — the weakest since January 2024.
- Monthly change: Flat on a seasonally adjusted basis, after a 0.3% fall in September.
- Average price: £273,566 (unadjusted), down from £274,251 in September.
- Source: Nationwide Building Society House Price Index, released 30 October 2026.
- Mortgage approvals: September approvals for house purchase fell to their lowest since December 2023, Bank of England data showed.
Why buyers are holding back
Nationwide chief economist Robert Gardner pointed to an uncertain economic outlook, pressure from energy prices and expectations that borrowing costs could rise. Geopolitical tensions remain high, he said, with the conflict in the Middle East exerting upward pressure on energy prices and fanning inflation concerns.
Surveyors have reported weak new-buyer inquiries, while consumer confidence deteriorated in October, according to Nationwide. The figures were slightly softer than economists had expected: a Reuters poll had forecast annual growth of 0.6% and a 0.1% monthly fall.
Higher borrowing costs ahead
After the US-Iran conflict broke out at the end of February, financial markets dropped expectations of Bank of England rate cuts this year and began to price in rate increases, pushing up the cost of mortgages that typically offer a fixed rate for two or five years. While the Bank of England has kept rates on hold so far, most economists now expect it to raise rates for the first time in three years next week, increasing its Bank Rate to 4% from 3.75%.
Bank of England data published on Thursday showed that the number of mortgages approved for house purchase in September had fallen to its lowest since December 2023, underlining how subdued demand has become.
What the figures do and do not show
Nationwide’s index measures prices on its own mortgage approvals and should not be treated as a census of every UK property transaction. Its October data provide an early signal of softer prices; they do not establish how many sales will close or where regional markets will finish the year.
Conclusion
For buyers, the October figures point to a market losing momentum: prices barely rising, inquiries weak and borrowing costs expected to climb. For sellers, they suggest patience may be needed as the market adjusts to a higher-rate environment.
