UK house prices experienced a 0.2% fall in September, Nationwide has reported, reversing the increase seen in August. This decline saw the average price drop from £275,465 to £274,251.
Annual house price growth also halved, moving from 1.6% to 0.8%, which marks the weakest rate recorded since December 2025. Four regions saw annual price falls in the third quarter, with East Anglia experiencing the largest decline at 0.7%.
Robert Gardner, Nationwide's chief economist, noted that market activity and house prices have remained subdued, partly due to an uncertain economic backdrop. He mentioned that geopolitical tensions, particularly the conflict in the Middle East, are contributing to higher energy prices and inflation concerns.
Despite this, Mr Gardner indicated that underlying affordability is improving as house price growth has been significantly below earnings growth for some time. However, these gains have been partially offset by higher mortgage rates.
Across Southern England, prices were down 0.1% annually, with London being the only southern region to record an increase. In contrast, the North West led England's regions with an annual growth of 3.9%, while Northern Ireland remained the strongest performer across the UK, though its growth slowed to 5.9%.
Annual price growth slowed across all property types in the third quarter. Terraced homes recorded the largest increase at 1.8%, while flat prices remained largely unchanged from a year earlier. This disparity, which dates back to early 2020, sees the value of a typical flat having risen by 14% compared to 31% for a semi-detached home. Mr Gardner suggested this difference is partly due to London's weaker performance, where flats constitute a larger proportion of housing.
Tom Bill, Knight Frank's head of UK residential research, stated that house prices are stalling as rising mortgage rates affect demand, a trend he expects to continue through the end of the year. Jeremy Leaf, a north London estate agent, added that higher borrowing costs, inflation, and increased choice are impacting confidence in the market, leading buyers to negotiate harder, particularly for flats.