UK House Price Growth Slows to 0.9% as London Falls 2.2%

The UK’s annual house price inflation slowed for a fourth consecutive month to 0.9% in August, according to the Office for National Statistics, down from 1.2% in July. The average UK home now stands at £273,000, but the headline figure masks a widening regional split.

England recorded the weakest annual growth at just 0.4%, taking the average to £294,000. Wales rose 3.1% to £216,000, and Scotland climbed 2.9% to £198,000. The most striking number is London: prices fell 2.2% year‑on‑year, driven by a sharp decline in flats, which account for roughly half of all capital sales.

Approvals and transactions below historic norms
Mortgage approvals in August were 15% below the 2017–19 average — the fourth consecutive month at that level — while completed transactions were 16% below the same benchmark. That combination of stable headline prices and depressed activity points to a market where sellers are holding their asking prices and buyers are holding their offers.

Savills’ October update confirms the trend. Nationwide recorded a 0.2% monthly fall in September, and annual growth halved to 0.8%. The lender’s data suggests that affordability — not sentiment — is now the binding constraint on the market.</p>

Prices falling in a third of postcodes
Zoopla’s local breakdown adds useful granularity. Prices are now falling in 35% of British postcodes, up from 12% a year ago. In London and the South East, 85% of homes sit in postcodes where values are declining, and the average London home has lost £5,400 over the past year.

The picture is different in the North West and Scotland. Postcodes in Liverpool, Carlisle, and Kilmarnock recorded growth of more than 4% over the same period, driven by stronger affordability and lower exposure to the flat‑heavy, buy‑to‑let‑dependent segments of the southern market.

What this means for buyers and sellers
The market is not crashing — it is repricing. Sellers in the south face a negotiation‑led environment where the initial asking price matters more than it has for a decade. Buyers should stress‑test affordability against mortgage rates near 6%, not the 1–2% deals of 2021, because a fixed rate locked in today will need to be refinanced at an unknown rate in two to five years.

For investors, the divergence between north and south creates opportunity, but it also raises the value of local knowledge. A postcode in Liverpool showing 4% growth is not the same asset class as a flat in central London showing a 5% decline — the risk profiles, tenant demand, and exit liquidity are entirely different.

The next data point to watch is the Bank of England’s November rate decision. If the base rate holds at or near current levels, expect the current pattern — flat national prices, regional divergence, and weak transaction volumes — to persist into early 2027.