UK house price growth slows to near three-year low as mortgage costs bite
Annual house price growth in the UK has slowed to its weakest level since early 2024, with Nationwide reporting monthly property value growth of 0.5 per cent in October as higher mortgage costs weigh on buyers.
UK house price growth has slowed to its weakest pace since January 2024, as higher mortgage costs continue to weigh on buyers. Nationwide Building Society said property values rose by 0.5 per cent in October, down from growth of 0.8 per cent in September.
The slowdown reflects the pressure that borrowing costs are placing on the housing market. Mortgage rates have climbed in recent months, reducing what many households can afford to borrow and cooling demand after a period of more resilient activity. Buyers are now weighing higher monthly repayments against the prices of homes they would like to purchase, and that calculation is showing up in the price data.
The figures indicate that the market is losing momentum rather than reversing course. Monthly price growth has narrowed, but values have not fallen sharply, which suggests the adjustment is taking place gradually. For homeowners, the change means that the rapid gains seen in earlier periods are no longer being repeated, while prospective buyers face a market where affordability remains the central constraint.
Commentators quoted in the reporting said the property market was expected to stay under pressure for some time. They argued, however, that prices should recover once the energy price shock that has fed into the wider economy fades. Easing that shock would reduce the inflationary pressure that has kept borrowing costs elevated, and lower rates would in turn support demand from buyers who have been holding back.
Lenders and policymakers are likely to follow the data closely, since the direction of house prices feeds into household wealth, consumer spending and the stability of mortgage books. The current reading places the market at its weakest annual pace in nearly three years, a position that reflects the cumulative effect of a more expensive credit environment than buyers faced before the recent rise in interest rates.
Whether conditions improve will depend largely on the path of mortgage rates and the broader economic outlook. For now, the Nationwide figures show a market in which price growth has slowed sharply, leaving buyers, sellers and lenders to adjust to a period of softer momentum while they wait to see whether the energy shock and borrowing costs ease in the months ahead.
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