Nationwide Building Society said British house prices posted their weakest annual growth since December 2025 in September, rising just 0.8% from a year earlier. The monthly figure also slipped, with prices falling 0.2% compared with August.
Higher borrowing costs and global tension weigh on demand
Nationwide’s chief economist, Robert Gardner, linked the slowdown to higher mortgage rates driven by the Bank of England’s anticipated rate hikes. Financial markets expect the central bank to raise the benchmark Bank Rate by a quarter‑point in November and again in February.
Gardner added that geopolitical uncertainty – especially the ongoing conflict in the Middle East – is keeping energy prices elevated, which in turn fuels inflation concerns. While higher energy costs have not yet translated into stronger underlying price pressure, the expectation of further BoE tightening continues to suppress buyer confidence.
Forecasts miss the mark
The September rise fell short of the 1.3% annual increase predicted in a Reuters poll of economists. In monthly terms, the 0.2% decline was the fastest drop since May and below the zero‑growth forecast from the same poll.
Government steps to aid first‑time buyers
In response to the housing‑affordability challenge, Prime Minister Andy Burnham announced a new loan programme aimed at first‑time buyers. The scheme will be open to homebuyers who can provide a 2.5% deposit and will offer loans covering up to 20% of a property’s value. Further details are expected in Finance Minister John Healey’s budget later this month.
The initiative seeks to help more families get on the property ladder, reinforcing the government’s commitment to supporting traditional families and homeownership – core values that align with the nation’s long‑standing emphasis on stable, family‑centered communities.
Outlook
Analysts caution that the housing market remains vulnerable to both domestic monetary policy and external shocks. If the Bank of England follows through on its projected rate increases, mortgage costs could rise further, potentially dampening demand even more.
Nevertheless, the government’s loan programme may provide a modest boost for first‑time buyers, offering a pathway to homeownership for families seeking stability in uncertain economic times.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
