The UK housing market’s slow streak continues as geopolitical tensions squeeze affordability for buyers.
Mortgage rates have gone up since the US and Israel launched airstrikes on Iran at the end of February.
According to financial data firm Moneyfacts, the average two-year fixed-rate deal is 5.96% as of 8 October, up from 4.83% on 27 February.
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Meanwhile HMRC said UK residential property transactions in August 2026 were 2% down on August 2025 and 1% lower than July 2026.
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Robert Gardner, chief economist at Nationwide, 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.”
How much can you expect to pay for a house?
House price indices (HPI), from major providers including Lloyds, Nationwide and the Office for National Statistics (ONS), as well as data from Zoopla and Rightmove, give a snapshot of the housing market.
Each HPI report varies, although the main indices place the average UK house price roughly between £270,000 and £370,000. These are UK-wide averages. Prices can vary dramatically depending on the region and methodology of each HPI.
HM Land Registry UK House Price Index
The most authoritative HPI is HM Land Registry, as its data includes cash purchases as well as homes financed through a mortgage. Data is published on a six-week time lag, making it more retrospective than other house price indices.
According to its latest report, the average UK house price is £272,611 as of July 2026, up 0.7% from £270,677 in June 2026.
Nationwide House Price Index
The most recent Nationwide data puts the average UK house price at £274,251 in September 2026, down 0.4% from £275,465 in August 2026 when not seasonally-adjusted.
Lloyds House Price Index
The latest Lloyds HPI (renamed after it retired the Halifax brand) shows the average UK house price is £298,441 as of September 2026, marginally up from £298,395 in August 2026.
Rightmove House Price Index
Unlike Nationwide and Halifax’s HPIs, which are based on the building society and bank’s valuations at the mortgage-approval stage, Rightmove’s HPI is based on asking prices.
According to Rightmove, asking prices rose by 0.7% between August 2026 and September 2026, from £364,999 to £367,440.
Zoopla House Price Index
The Zoopla HPI uses sold prices, mortgage valuations and data for agreed sales to calculate house prices for any given month.
Zoopla puts the average UK house price at £273,000 as of August 2026, up marginally from £272,800 in July 2026.
How much confidence is there in the market?
As well as the five main house price indices, the Royal Institute of Chartered Surveyors (RICS) also publishes a monthly UK Residential Market Survey.
The survey generates net balance scores between -100 and +100 in response to a series of questions put to its members (estate agents and surveyors) about how the housing market has changed for better or worse.
The latest survey, covering the month of September 2026, reveals that interest rate rise expectations have stalled optimism which was growing over the summer.
The agreed sales metric dropped from -16% to -18% between August and September, while new buyer enquiries fell to -22%, down from -18% in August.
Meanwhile the headline house price measure slipped to -32% from -28% over the same period, breaking a run of four consecutive months of rises.
Respondents to the latest survey also recorded a net balance score of -24% over near-term house price expectations.
Will house prices rise in 2026 and beyond?
Estate agents, lenders and economists are generally more negative about where UK house prices are going in 2026 and beyond than they were at the start of the year, due to the outbreak of tensions in the Middle East in February 2026.
Economists at Pantheon Macroeconomics previously forecasted UK house prices would rise by 3% in 2026, but now expect them to flatline.
Estate agent Savills is forecasting a 2% drop this year, while Knight Frank’s latest predictions suggest property prices will rise by 1.5% in 2026.
Zoopla has said house price growth will slow to 0.5% by the end of the year, down from a previous prediction of 1%.
Rightmove started the year predicting asking prices would rise by 2% but now expects them to either be flat or to fall by 2%. The property website said this reflects mortgage rate movements, wider economic uncertainty and the potential impact of the forthcoming Budget.
However, the housing market could yet liven up, with September onwards usually busier than the summer months as buyers return from holidays.
