UK House Price Growth Falls Short of Forecast

The UK Nationwide House Price Index rose 1.6% year-on-year in August 2026, following a revised 1.4% increase in July and coming in below the expected 2.1% gain. Nationwide Chief Economist Robert Gardner said market activity and house prices have remained subdued in recent months amid an uncertain economic backdrop, with Middle East tensions pushing up energy prices and contributing to volatility in market interest rate expectations. However, moderating private-sector wage growth and signs that higher energy costs have not yet fed into underlying price pressures could give the Bank of England more room to assess policy. Gardner noted that affordability is improving as house price growth remains well below earnings growth, although higher mortgage rates have offset some of the gains. He added that activity could regain momentum if the energy shock fades and market interest rates decline. On a monthly basis, house prices grew 0.2%, following a 0.1% fall in July.

The UK Nationwide House Price Index rose 1.8% year-on-year in July 2026, slowing from a 2.2% increase in June and coming in slightly below market expectations of a 1.9% gain. Nationwide Chief Economist Robert Gardner said renewed geopolitical tensions, particularly the conflict involving Iran and the US, have pushed up energy prices and contributed to volatility in market interest rate expectations. However, he noted that easing consumer inflation and moderating wage growth have given the Bank of England greater scope to assess whether further policy tightening is needed to return inflation to target. Gardner also highlighted that the latest housing survey showed the average length of residence has remained broadly stable at around 14 years, with outright homeowners staying in the same property for nearly 24 years on average, while private renters typically remain in a home for around five years. On a monthly basis, house prices edged up 0.1%, following a flat reading in June.

The UK Nationwide House Price Index rose 2.2% year-on-year in June 2026, missing market expectations of 2.4% but accelerating from a 1.7% increase in May. Nationwide Chief Economist Robert Gardner said that easing geopolitical tensions and lower-than-expected inflation have strengthened expectations that the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated. He also noted that the decline in market interest rates underpinning fixed-rate mortgage pricing has already begun to improve affordability conditions. Gardner added that, if sustained, these trends should help restore household confidence and support a recovery in housing market activity in the coming quarters. Regionally, Northern Ireland remained the strongest-performing area in the second quarter, with house prices 8.6% higher than a year earlier. On a monthly basis, house prices showed a flat reading, in line with forecasts, following a 0.6% rise in May.