Annual house price growth in the UK decelerated for the fourth consecutive month in August, according to the latest Land Registry data, with the average property price reaching £272,611.
The Land Registry House Price Index showed annual price growth of 0.9% in August, down from 1.2% in July. Monthly price growth also slowed from 0.6% to 0.3%.
Regional variations
England recorded the slowest growth, with average house prices rising 0.4% annually to £294,000. Wales saw prices increase by 3.1% to £216,000, whilst Scotland recorded growth of 2.9% to £198,000. Northern Ireland experienced the strongest annual growth at 9.2%, with average prices reaching £202,000 in the second quarter of 2026.
Among English regions, the North East recorded the highest annual inflation at 3.2% in the 12 months to August 2026, down from 4.7% in the previous month. London remained the weakest performer, with prices declining 2.2% annually, though this represented an improvement on the 3.2% fall recorded in July. London flats experienced a particularly sharp decline of 5.0% over the year.
Market conditions
Jason Tebb, President of OnTheMarket, noted that increased stock levels and affordability pressures are constraining price growth. “The picture is mixed, with some lenders raising rates at the same time as others trim theirs,” he said, adding that higher inflation is fuelling expectations of a potential rate rise at the Bank of England’s November meeting.
Richard Donnell, Executive Director of Research at Zoopla, said buyer enquiries and sales have been affected by higher mortgage rates. “There are fewer sales right across the country as homebuyers adopt a wait and see approach ahead of next week’s Budget,” he stated.
Nicky Stevenson, Managing Director of Fine & Country, emphasised that the number of homes available for sale has reached its highest level for this time of year since 2014. “That puts the emphasis firmly on presentation, condition and, above all, pricing,” she said.
Economic outlook
Jeremy Leaf, a north London estate agent and former RICS residential chairman, pointed to rising wages and a recovering job market as positive factors, though he noted that uncertainty has resulted in buyers delaying decisions. Nathan Emerson, Chief Executive at Propertymark, described the market as showing resilience despite affordability pressures from rising energy and fuel costs.
Iain McKenzie, Chief Executive of The Guild of Property Professionals, highlighted that inflation has risen to 3.1%, adding further strain to household budgets. “For sellers, realistic pricing from the outset will be essential if they want to attract serious buyers in a market where affordability is stretched,” he said.
The slowdown in price growth comes as recent Budget announcements have left Capital Gains Tax rates unchanged for landlords, whilst high-value mortgage activity continues to expand outside London and the South East.
Outlook
With the possibility of an interest rate rise in November and ongoing economic uncertainty, market participants expect continued caution among buyers and sellers in the coming months. The emphasis remains on realistic pricing and financial preparedness as affordability constraints persist across most regions.
