Annual UK house price growth halved to 0.8% in September from 1.6% in August, according to Nationwide's latest house price index. The average price slipped to £274,251 from £275,465 over the same period.
Northern Ireland remained the best-performing region, with prices up 5.9% year on year in the third quarter, while East Anglia lagged with a 0.7% annual fall. Terraced properties delivered the strongest returns of any property type at 1.8%, whereas flats were essentially unchanged on a year ago.
"September saw UK annual house price growth halve to 0.8%, the weakest rate of growth since December 2025," said Robert Gardner, chief economist at Nationwide. "Prices were down 0.2% month-on-month, after taking account of seasonal effects."
Gardner tied the slowdown to the wider economic picture. "Market activity and house prices have remained subdued in recent months, in part reflecting the uncertain economic backdrop," he said.
"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."
"Nevertheless, there have been encouraging signs that higher energy prices are not feeding through to underlying price pressures," he added. "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," Gardner noted.
"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."
Property consultancy Knight Frank also pointed to mortgage costs. "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," said Tom Bill, head of UK residential research at Knight Frank.
"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."
Propertymark, the professional body for estate and letting agents, focused on affordability and the Autumn Budget. "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," said Nathan Emerson, CEO at Propertymark.
"Many consumers are taking a more cautious approach to their household finances, with affordability pressures continuing to influence decisions around buying and selling property."
"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," Emerson continued.
"Support to help first-time buyers overcome the barriers to homeownership would be particularly welcome as we round the year off, while measures that encourage investment in housing will also be important to ensure the market is equipped to meet future demand."
House price growth slows in most regions
Nationwide's regional figures, which cover the three months to September, put UK annual growth at 1.2%, down from 2.2% in the previous quarter. The North West led England with prices up 3.9%, while Scotland and the North each recorded 3.3%. Yorkshire & The Humber rose 1.2%, Wales 0.7%, the West Midlands 0.6% and London 0.4%.
"Most regions saw a slowing in annual house price growth in Q3 (the three months to September)," Gardner said. "Eight of the thirteen regions saw annual growth below 1%, with four of these recording a small annual decline (see table below)."
"There is a distinct regional pattern, with the strongest performing regions located in northern England, Scotland and Northern Ireland," he explained. "The latter remained the strongest performing region by a healthy margin, although annual price growth slowed to 5.6%, from 8.6% in Q2."
"Overall, England saw annual price growth slow to 0.5%," Gardner noted. "Average prices in Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands) were up 1.6% year on year. The North West (which includes areas such as Cheshire, Lancashire & Greater Manchester) remained the top-performing region in England, with prices up 3.9% year on year, unchanged from last quarter."
"Meanwhile, average prices in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) were down 0.1% year on year," he said.
"London was the only southern region to record an annual price rise, a modest 0.4%. Meanwhile, the surrounding Outer Metropolitan region saw a 0.2% annual fall. East Anglia was the weakest performing UK region, with prices down 0.7% year on year."
Flats trail other property types
"Our most recent data shows that all property types saw a slowing in annual house price growth in Q3," Gardner added. "Terraced properties were the strongest performing, with a 1.8% rise, whilst flats remained weakest with prices essentially unchanged compared with a year ago."
"Looking over the longer term, flats have seen noticeably weaker growth than other property types," he continued.
"For example, since the start of 2020, the price of a typical flat has increased by 14%, less than half the rise in the price of semi-detached, which saw a 31% rise over the same period. This is partly a reflection of regional trends where London, which has a much greater proportion of flats, has underperformed the wider UK."
