UK house prices dip 0.2% in October as borrowing costs rise

Nationwide said the average unadjusted UK house price slipped from £274,251 in September to £273,566 in October, a decline of £685. The drop follows a slowdown in annual house-price growth to 0.5% in October, the weakest rate since January 2024, according to the society’s chief economist, Robert Gardner.

Gardner attributed the slowdown to rising borrowing costs, with some mortgage rates reaching 6%, and to higher energy prices linked to the conflict in the Middle East. He noted that tighter financing has reduced affordability, leading prospective buyers to pause their searches and causing mortgage approvals to fall to their lowest level since 2023.

The market’s caution was also linked to the budget announced by Chancellor John Healey on October 28, which prompted many buyers to wait for further fiscal clarity. Jonathan Hopper, chief executive of Garrington Property Finders, described the situation as a “soft-landing” overall but warned that certain regions remain “bumpy”. He said the quarterly decline in house values eased to 0.2%, while the annual growth rate slowed again.

Hopper added that, despite the budget’s passage, affordability pressures persist and sellers in parts of southern England must compete for viewings. He observed that buyers are focusing on the overall price they pay rather than the size of any discount, and that expectations of a Bank of England rate cut are low ahead of the upcoming Monetary Policy Committee meeting.

Both Gardner and Hopper expect the market to remain cautious and negotiation-driven in the coming months, with buyers taking a longer-term view amid near-term volatility.