House price growth slows to 0.9% as affordability pressures persist: ONS

UK house prices increased by 0.9% in the 12 months to August 2026, taking the average property value to £273,000, according to provisional figures from the Office for National Statistics (ONS).

The annual growth rate was down from 1.2% in the 12 months to July, as higher mortgage rates and affordability pressures continued to weigh on the housing market.

National breakdown

In England, the average house price reached £294,000 in August, an annual increase of 0.4% (£2,000). This was down from annual growth of 0.9% in July, making England the slowest-growing market among the UK nations for which monthly figures were available.

Wales recorded stronger growth, with the average house price rising to £216,000, up 3.1% (£6,000) year-on-year. This was an acceleration from the 2.2% annual increase recorded in July.

In Scotland, average house prices reached £198,000, representing annual growth of 2.9% (£5,000), compared with 2.4% in the 12 months to July.

Northern Ireland recorded the strongest annual price growth, with the average house price reaching £202,000 in the second quarter of 2026, up 9.2% (£17,000) compared with the same period a year earlier.

The annual inflation rate in Northern Ireland increased partly because prices rose by 2.1% between the first and second quarters of 2026, compared with growth of 0.6% over the same period in 2025. The lower rate of growth in the second quarter of last year coincided with the April 2025 Stamp Duty Land Tax changes.

The latest annual increase is the highest recorded in Northern Ireland since the fourth quarter of 2022, when prices rose by 10.1%.

Tom Bill, head of UK residential research at Knight Frank, said: “UK house price growth has ground to a halt this year as the impact of higher mortgage rates takes its toll on buyers. Declining mortgage approval numbers show transaction activity will also decline in the final months of the year. The outlook for the UK housing market hinges uncomfortably on an overseas geopolitical risk, but downward pressure on prices could reverse quickly if the unpredictable Middle East conflict de-escalates or ends. As affordability constraints bite, it is no surprise to see the biggest price impact in London.”

Richard Donnell, executive director of research at Zoopla, said: “House price inflation is slowing as higher mortgage rates hit buyer enquiries and the number of sales agreed. Zoopla data shows that there are fewer sales right across the country as homebuyers adopt a wait-and-see approach ahead of next week's Budget.

"Homes that sell are doing so almost as quickly as last year, but buyers are becoming more selective, particularly when homes are not well presented or priced unrealistically for what buyers are willing to pay. There are serious buyers in the market, but it's essential to speak to an agent to understand how to reach them.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The higher cost of living is squeezing household affordability, and impacting what those who need to move are prepared to spend.

“Inflation rising again to 3.5 per cent, considerably above the Bank of England’s 2 per cent target, is unwelcome news as far as interest rates are concerned. However, it’s not surprising given ongoing tensions in the Middle East fuelling inflationary pressures, and borrowers should prepare for higher mortgage costs.

“Although the Bank of England held the base rate at its last meeting, volatile Swap rates, which underpin mortgage pricing, have resulted in mixed pricing movements by lenders, with some trimming rates while others increase pricing. The average shelf-life of products has also contracted as lenders try to deal with changing funding costs.

“Those who need a mortgage in coming months may wish to speak to a broker and secure a rate now, with the view to switching to a cheaper one when you come to take it out, should a lower rate be available at that time.”

Nathan Emerson, CEO at Propertymark, said: “It is positive to see the housing market showing resilience as autumn begins. It has been a challenging year for buyers facing affordability pressures, particularly amid rising energy and fuel costs, but house prices continue to demonstrate resilience across many regions.

“With the upcoming Budget only weeks away, attention is turning to what measures the UK Government may announce to support the housing market. Any changes could influence the decisions of those considering buying or selling a home.”