UK house prices continue to struggle amid renewed geopolitical tensions and as fears grow over interest rate increases.
A glut of homes for sale on the market has given buyers more room to squeeze prices down as well. Some estate agents say we’re firmly in a buyer’s market.
Mortgage rates had fallen in recent weeks but are now back on the rise as lenders react to higher swap rates.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
The average two-year fixed-rate deal is 5.67% as of 10 September, up from 5.59% on 1 September, according to data firm Moneyfacts.
Latest Videos FromMoneyWeek
The same length deal was 4.83% on 27 February, the day before the US and Israel launched joint strikes on Iran.
Tom Bill, head of UK residential research at estate agent Knight Frank, said: “After a spring slowdown driven by higher mortgage rates, demand has stabilised as borrowing costs reset and the government avoids fuelling the sort of pre-Budget speculation that has put buyers off in recent years.
“Prices are largely moving sideways but activity could be sustained through the autumn provided the Budget doesn’t reignite a mood of uncertainty.”
How much can you expect to pay for a house?
We look at the latest data from the major house price indices (HPI), including Lloyds, Nationwide and the Office for National Statistics (ONS), as well as data from Zoopla and Rightmove.
Each HPI report varies, although the main indices put the average UK house price at between £270,000 and £365,000.
That said, these are UK averages. Prices can vary dramatically depending on the region and methodology of each HPI.
HM Land Registry UK House Price Index
The most authoritative HPI is HM Land Registry, as its data includes cash purchases as well as homes financed through a mortgage. Data is published on a six-week time lag, making it more retrospective than other house price indices.
According to the latest data from the Land Registry, the average house price is £272,188 as of June 2026, up just 0.1% from May 2026.
Nationwide House Price Index
The most recent Nationwide data puts the average UK house price at £275,465 as of August 2026, a fall of 0.4% from £276,581 in July 2026.
Annual house price growth slowed to 1.6% in the year to August 2026, from 1.8% in the 12 months to July 2026 and 2.2% in the year to June 2026.
Lloyds House Price Index
The latest Lloyds HPI (renamed after it retired the Halifax brand) shows the average UK house price is £298,468 as of August 2026, down from £299,153 in July 2026.
The lender also said house prices fell on an annual basis for the first time since November 2023.
Rightmove House Price Index
Unlike Nationwide and Halifax’s HPIs, which are based on the building society and bank’s valuations at the mortgage-approval stage, Rightmove’s HPI is based on asking prices.
According to Rightmove, asking prices fell by 2% in the month to August from £372,359 to £364,999, the largest August drop since 2018.
Zoopla House Price Index
The Zoopla HPI uses sold prices, mortgage valuations and data for agreed sales to calculate house prices for any given month.
Zoopla puts the average UK house price at £272,800, as of July 2026, the same as June 2026, but a fractional fall from £272,300 in May 2026.
How much confidence is there in the market?
As well as the five main house price indices, the Royal Institute of Chartered Surveyors (RICS) also publishes a monthly UK Residential Market Survey.
The survey generates net balance scores between -100 and +100 in response to a series of questions put to its members (estate agents and surveyors) about how the housing market has changed for better or worse.
The latest survey, covering the month of August 2026, reveals estate agents and surveyors are feeling more optimistic than earlier in the year, but a challenging macroeconomic backdrop remains.
The RICS report said future interest rate expectations would likely be a dampener on the sales market.
The new buyer enquiry metric scored -19%, although this was its highest reading since January.
Meanwhile the headline net balance score on the house price metric was -28%, slightly more positive than the -29% score in July 2026 and much improved on the -35% score covering the April 2026 period.
This indicates that estate agents and surveyors believe prospects for UK house prices to rise are improving.
Will house prices rise in 2026 and beyond?
Despite that optimism, estate agents and economists are more pessimistic about potential UK housing growth in 2026 than they were at the start of the year, prior to the conflict in the Middle East and when mortgage rates were lower.
Economists at Pantheon Macroeconomics previously forecasted UK house prices would rise by 3% in 2026, but now expect an increase of just 1%.
Estate agent Savills is forecasting a 2% drop this year, while Knight Frank’s latest predictions expect property prices to rise by 1.5% in 2026.
Zoopla has said annual house price inflation is expected to reach 1% by the end of 2026.
Rightmove started the year predicting asking prices would rise by 2% but now expects them to either be flat or to fall by 2% instead. The property website said this reflects mortgage rate movements, wider economic uncertainty and the potential impact of the forthcoming Budget.
However, the market could liven up soon following a slower summer period. In its August HPI, Zoopla said searches on its portal were 7% higher than the same period last year as buyers return to the market.
“We expect the market to remain fairly subdued in the months ahead, but this will likely only have a limited impact on house prices,” said Andrew Assam, mortgages director at Lloyds. “While affordability remains a challenge, wages continue to grow and employment has held up better than many anticipated. This will help to support demand from those who need or want to move.”
