House price growth halves in September as mortgage rates rise

Updated: 04:48 EDT, 1 October 2026 House price growth fell in September, according to the latest figures from Nationwide Building Society.Annual price growth halved from 1.6 per cent in August to 0.8 per cent in September, with the typical home now worth £274,251.Nationwide says this was the weakest rate of annual growth recorded since December 2025. The typical home also fell by £1,214 or 0.2 per cent on a monthly basis. It continues a downward slump over recent months that has seen average house prices fall by £4,639 since April. Robert Gardner, chief economist at Nationwide, attributed the subdued market to the 'uncertain economic backdrop.' He said: 'Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices, fanning inflation concerns. 'This in turn has led to mounting financial market expectations of bank rate increases, which has maintained upward pressure on the market interest rates which underpin mortgage pricing.' UK annual house price growth halved to 0.8 per cent in September, from 1.6 per cent in August, according to NationwidePrices in northern parts of England have risen over the past 12 months with values in the North West and North East up 3.9 per cent respectively.Meanwhile, prices in the south have continued to flatline or fall with home values across London's commuter belt down 0.4 per cent over the last 12 months. This includes places like Basildon, Buckinghamshire and Chelmsford.Prices in East Anglia are 0.7 per cent lower than this time last year, while prices in the East Midlands are 0.5 per cent lower.And in the South West, average home values have dropped 0.3 per cent lower year-on-year.Jonathan Hopper, chief executive of buying agent Garrington Property Finders, said: 'The number of homes for sale exceeds the number of serious buyers.'This is applying downward pressure to prices, and no longer just in the South East.'Mortgage rates on the rise Some of the slump in recent months is being caused by rising mortgage rates.Nationwide Building Society, Virgin Money and TSB all pushed up mortgage rates this week with sub-5 per cent deals vanishing.Most households are now having to settle for a rate between 5 and 5.5 per cent. This marks a dramatic shift from six months ago. In the first two months of the year, most borrowers were able to get rates below 4 per cent with two-year fixes even going as low as 3.5 per cent at one stage.Net mortgage approvals for house purchases – an indicator of future borrowing – decreased to 54,900 in August, according to the Bank of England, down from 55,900 in July and below an average of around 60,100 over the previous six months. Hopper added: 'While buyer sentiment is fragile in many areas, prices in the south are being squeezed disproportionately hard.'The reason is that high property values in these areas mean that many buyers typically need a large mortgage, and the rise in interest rates over recent months has reduced the amount they can afford to borrow. 'All this means that the buyers who are out there are spoilt for choice and making the most of their powerful negotiating position.'Best mortgage rates and how to find them Mortgage rates have shot up again due to inflation triggered by the conflict with Iran reversing hopes that the Bank of England would cut rates. This means those remortgaging or buying a home face higher costs.That makes it even more important to search out the best possible rate for you and get good mortgage advice, whether you are a first-time buyer, home owner or buy-to-let landlord.This is Money's partner L&C can help you with its fee-free mortgage service.> Compare mortgage rates> Find the right mortgage for you To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C.This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit.You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes.If you’re ready to find your next mortgage, why not use This is Money and L&C’s online Mortgage Finder? It will search 1,000s of deals from more than 90 different lenders to discover the best deal for you.> Find your best mortgage deal with This is Money and L&C Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.