By Fatma Younis
UK house price growth slowed to its weakest annual pace in almost three years in October, as higher mortgage costs weighed on the market, according to data from Nationwide Building Society.
Annual Growth Slows to 0.5%
The building society's index showed annual house price growth of 0.5% in October, down from 0.8% in September and the lowest reading since January 2024. Month-on-month prices were flat, leaving the average UK property valued at £273,566.
Mortgage Costs Linked to Rate Expectations
Nationwide’s chief economist Robert Gardner attributed the slowdown to borrower caution driven by rising mortgage costs. He linked higher mortgage rates to financial market expectations of Bank of England rate increases, as policymakers aim to cool inflation fueled by geopolitical tensions in the Middle East.
Market Expected to Recover After Energy Shock
Gardner said the property market would likely remain under pressure in the near term, with weak buyer inquiries and declining consumer sentiment. However, he predicted a recovery once the energy price shock fades, citing forward-looking indicators.
Zoopla Data Shows Widespread Price Falls
Separate data from property website Zoopla revealed that 35% of UK homes are in postcode areas where values have fallen over the past year, up from 12% a year earlier. Price declines were concentrated in London and the South East, where 85% of homes are in areas with falling prices.
Northern Regions and Scotland See Growth
Despite the overall slowdown, some areas continue to see annual price rises above 3%, particularly in the North West and Scotland. Zoopla reported growth exceeding 4% in postcode areas including Liverpool, Carlisle and Kilmarnock.
