The Land Registry’s House Price Index reported a 0.9% annual increase in August, down from 1.2% in July, while monthly growth dropped from 0.6% to 0.3%.
On a monthly basis, prices also rose more slowly, increasing by 0.3% compared to 0.6% in July.
Regional Variations
England’s house prices grew the slowest, rising by 0.4% annually to an average of £294,000.
In Wales, prices climbed by 3.1% to £216,000, while Scotland saw a 2.9% increase to £198,000.
Northern Ireland led with the strongest annual growth at 9.2%, reaching an average price of £202,000 in the second quarter of 2026.
Among English regions, the North East saw the highest annual increase at 3.2% in the year to August 2026, down from 4.7% the previous month.
Market Analysis
Jason Tebb, President of OnTheMarket, noted that higher stock levels and affordability challenges are limiting price increases.
“The picture is mixed, with some lenders raising rates at the same time as others trim theirs,” he said, adding that higher inflation is fueling expectations of a potential rate rise at the Bank of England’s November meeting.
Richard Donnell, Executive Director of Research at Zoopla, stated that higher mortgage rates have impacted buyer inquiries and sales.
Nicky Stevenson, Managing Director of Fine & Country, highlighted that the number of homes for sale is at its highest level for this time of year since 2014.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, pointed to rising wages and a stronger job market as positive factors, though he noted that uncertainty is causing buyers to delay decisions.
Market Outlook
Iain McKenzie, Chief Executive of The Guild of Property Professionals, noted that inflation has risen to 3.1%, adding further pressure on household finances.
“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 follows recent Budget announcements that left Capital Gains Tax rates unchanged for landlords, while high-value mortgage activity continues to grow outside London and the South East.