UK house price growth HALVES to 0.8% in September as Middle East conflict drives up mortgage rates

From the Newshound archive · first published 1 October 2026 · last updated 2 October 2026.

Annual house price growth has dropped to its weakest pace since December 2025. The average property is now valued at £274,251, a month-on-month decline of £1,214. Nationwide Building Society chief economist Robert Gardner attributed the slowdown to geopolitical tensions stemming from the Middle East conflict, which is pushing energy prices up, fuelling inflation concerns and lifting mortgage rates. Since April, average prices have dropped £4,639, with southern regions bearing the brunt of the falls while the north has proved more resilient.

Two-year fixed mortgage rates have climbed to their highest point since July 2024, and five-year fixed rates are at their highest since October 2023.

Northern regions are outperforming the rest of the country — the North West and North East each recorded annual growth of 3.9% — while London's commuter belt slipped 0.4%.

Gardner says momentum could return if the energy shock fades, but only 'if market interest rates fall back to pre-conflict levels.'