UK house price growth slows sharply in September 2026
Annual UK house price growth halved to 0.8% in September, with prices falling 0.2% month-on-month. Regional performance diverged sharply, with Northern Ireland leading gains and East Anglia in decline, as higher mortgage rates subdued market activity.
UK house price growth slowed to its weakest point in months during September 2026. Annual growth halved to 0.8% from 1.6% the previous month, representing the slowest rate since December 2025, according to Nationwide's data. On a seasonally adjusted basis, prices fell by 0.2% between August and September. The average UK home price stood at £274,251.
Regional contrasts emerge
While most regions saw slowing growth, a sharp north-south divide defined the market in the third quarter of 2026. Northern Ireland remained the strongest performer by a healthy margin, though its annual growth slowed to 5.9% from 8.6% in the previous quarter. Northern England, Scotland, and Northern Ireland were the strongest areas overall.
In England, annual price growth slowed to just 0.5%. The North West was the top performing English region, with prices up 3.9% year-on-year, a rate unchanged from the prior quarter. Average prices across Northern England rose by 1.6%. In contrast, average prices in Southern England fell by 0.1% year-on-year. London was the only southern region to record an annual rise, a modest 0.4%, while the Outer Metropolitan region saw a 0.2% fall. East Anglia was the weakest UK region, with prices down 0.7% annually.
Eight of the thirteen UK regions saw annual growth below 1%, with four of those recording a small annual decline. Property type performance also varied significantly since the start of 2020.
| Property Type | Price Change Since Start of 2020 |
|---|---|
| Semi-detached home | 31% |
| Flat | 14% |
In the latest quarter, terraced properties were the strongest performing, with a 1.8% annual rise. Flat prices were essentially unchanged year-on-year, a weaker performance partly reflecting London's high proportion of flats and its market underperformance.
Affordability improves but mortgage rates bite
Nationwide's chief economist, Robert Gardner, noted that underlying affordability is improving. "Underlying affordability is improving, as house price growth has been well below earnings growth for some time," he stated. However, these gains have been partially offset by higher mortgage rates.
Geopolitical tensions are a key driver. Robert Gardner said, "Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices, fanning inflation concerns." This has led to market expectations of Bank of England rate increases, maintaining upward pressure on the market interest rates that underpin mortgage pricing. Consequently, market activity and house prices have remained subdued in recent months.
Government scheme sparks builder interest
Amid the subdued market, the UK government launched the Your First Home scheme in England to assist first-time buyers without family financial support. The scheme offers a government-backed equity loan worth 20% of the purchase price of a new-build flat or house. Buyers need only a 2.5% minimum deposit and would require a standard mortgage for the remaining 77.5% of the property's value. News of the scheme boosted share prices of major housebuilders including Persimmon, Barratt Redrow, Taylor Wimpey, Crest Nicholson, and Vistry.
Market activity and house prices should regain momentum if energy shocks fade, confidence returns, and mortgage rates fall to pre-conflict levels.
