UK House Price Growth Halves as Borrowing Costs Surge
Nationwide Building Society reports UK annual house price growth fell to 0.8% in September amid rising mortgage rates and record-high government borrowing costs.
Annual house price growth in the United Kingdom halved to 0.8% in September, down from 1.6% in August, according to data from Nationwide Building Society. Average property values dropped 0.2% month-on-month to £274,251, representing the weakest annual growth rate since December 2025.
Regional performance varied, with Northern Ireland recording the strongest annual growth at 5.9%, while East Anglia saw the steepest decline at 0.7%. The slowdown is attributed to rising mortgage rates and economic uncertainty stemming from geopolitical tensions in the Middle East, which have pushed up energy prices and inflation concerns.
Parallel to the housing slump, UK government borrowing costs have surged. Thirty-year gilt yields hit 6% for the first time since 1998, and 10-year yields reached their highest level since 2007. This bond market volatility increases pressure on Chancellor John Healey as he prepares the upcoming budget.
In response to the challenging market, the government announced Your First Home, a new assistance scheme for first-time buyers purchasing new-build homes in England.
