UK house price growth slows to 0.5%, weakest since January 2024: Nationwide

UK house price growth slowed to 0.5% a year in October 2026, its weakest pace since January 2024, according to the Nationwide house price index published on Friday, October 30, 2026. Annual growth eased from 0.8% in September, and prices were unchanged from the previous month after seasonal adjustment. The average UK home cost £273,566. Nationwide's chief economist, Robert Gardner, linked the slowdown to higher mortgage rates and stretched affordability, and to economic uncertainty, including the conflict in the Middle East, which has pushed up energy prices.

Housing is the biggest purchase most families make, and in Britain house prices shape everything from how people feel about their finances to how much banks lend and how much builders build. A slowdown to 0.5% annual growth means prices are, in effect, flat. The monthly figure, unchanged in October after a 0.3% fall in September, confirms that picture.

The main pressure is the cost of borrowing. Gardner explained the chain of events: the Middle East conflict has pushed up energy prices and fanned inflation concerns, which, he said, "has led to mounting financial market expectations of Bank Rate increases, which have maintained upward pressure on the market interest rates which underpin mortgage pricing." The average five-year fixed mortgage rate crossed 6% earlier in October for the first time in three years. When mortgage rates rise, buyers can borrow less for the same monthly payment, and surveyors report that new buyer enquiries remain weak.

There is a cushion, though. Gardner noted that the improvement in affordability over the past two years, when incomes grew much faster than house prices, has been only partly reversed by higher rates. That is one reason Nationwide expects the market to regain momentum once the energy shock passes. Not everyone agrees: Ashley Webb of the research firm Capital Economics expects prices to keep falling in the coming months.

The gap between Nationwide's early-year forecast and the reality is striking. In January it expected prices to rise by 2% to 4% across 2026. Ten months in, annual growth is at 0.5%. That shows how quickly higher energy costs and mortgage rates can change the picture.

Average UK house price in October: £273,566.

For buyers, a flat market can mean more room to negotiate and less pressure to rush. For sellers, it means pricing realistically. For homeowners who need to remortgage, the main concern is not prices but the higher rates they may face when fixed deals end.

Short-term: Nationwide expects more softness in the coming months. Buyers may find sellers more willing to negotiate, while mortgage costs remain the main hurdle for first-time buyers.

Long-term: Nationwide expects the market to recover once the energy price shock fades. How fast that happens will depend on energy prices, inflation and the path of interest rates.

Who is affected: Home buyers and sellers in the UK, first-time buyers, homeowners coming to the end of fixed-rate mortgages, lenders and housebuilders, and overseas investors in UK property.

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