The annual growth of UK house prices decelerated for a fourth straight month in August, official statistics reveal.
Data from the Office for National Statistics (ONS) shows that annual price inflation eased to 0.9 per cent in August from 1.2 per cent in July, influenced by slowing annual growth across six of the nine regions in England.
The mean UK property price stood at £273,000 during August.
Across the home nations, average home values reached £294,000 in England (a 0.4 per cent annual rise), £216,000 in Wales (3.1 per cent), and £198,000 in Scotland (2.9 per cent).
Northern Ireland recorded a typical house price of £202,000 during the second quarter of this year, representing a 9.2 per cent annual increase.
In London, average property values fell by 2.2 per cent in the year to August, pushed down by a 5.0 per cent decline in flat prices over the 12-month period.
Flats account for half of all property sales in London compared with around a fifth across Britain, the ONS said.
The North East was the English region with the highest annual house price inflation, at 3.2 per cent.
The ONS also said that the average monthly private rent in the UK was £1,406 in September 2026. This is £52 (3.8 per cent) higher than 12 months earlier.
Figures released by the ONS on Wednesday also showed that Consumer Prices Index (CPI) inflation was 3.5 per cent in September, up from 3.1 per cent in August.
This was the highest since 3.6 per cent recorded in October last year, and above a rate of 3.4 per cent expected by some economists.
David Hollingworth, associate director at L&C Mortgages, said the inflation increase “is likely to cement expectation of a base rate rise to come in November”.
He added: “Those coming to the end of a current fixed (mortgage) deal will not only face higher rates but also a more volatile market where deals can come and go quickly.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Borrowers should prepare for higher mortgage costs.
“Although the Bank of England held base rate at its last meeting, volatile swap rates, which underpin mortgage pricing, have resulted in mixed pricing movements by lenders with some trimming rates while others increase pricing.”
Karen Noye, a mortgage expert at wealth manager Quilter, said: “As we move towards winter, the picture facing prospective buyers is darkening.
“Today’s inflation figures will do little to improve the mood.
“CPI inflation jumped from 3.1 per cent to 3.5 per cent in September, with core inflation and services inflation also moving higher.
“That makes meaningful interest rate cuts harder to envisage and increases the risk of mortgage costs remaining higher for longer.
“Affordability is already stretched for many buyers and uncertainty over where mortgage rates go next is adding another reason to hesitate.”
She added: “There are some potential silver linings.
“The Budget should give us greater clarity on the government’s plans to help first-time buyers, including further detail around the proposed first-time buyer Isa and the first homes scheme.
“If those measures genuinely improve affordability and help more people make the first step onto the property ladder, the benefits could travel further up the chain as existing owners are put in a stronger position to move.”
Nick Leeming, chairman of estate agency Jackson-Stops, said: “The Budget must support a housing market that works at every stage of people’s lives.”
Nicky Stevenson, managing director of Fine & Country, said: “We may see some continued restraint in the short term, but this is a market that rewards realistic expectations rather than one that has ground to a halt.
“Sellers who price competitively from day one and buyers who are financially prepared can still find opportunities, even in a more demanding market.”
Tom Bill, head of UK residential research at Knight Frank, said: “The outlook for the UK housing market hinges uncomfortably on an overseas geopolitical risk, but downward pressure on prices could reverse quickly if the unpredictable Middle East conflict de-escalates or ends.
“As affordability constraints bite, it is no surprise to see the biggest price impact in London.”
Richard Donnell, executive director of research at Zoopla, said: “Homes that sell are doing so almost as quickly as last year, but buyers are becoming more selective, particularly when homes are are not well presented or priced unrealistically for what buyers are willing to pay.
“There are serious buyers in the market but it’s essential to speak to an agent to understand how to reach them.”
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