‘Difficult news’ for homeowners as house price growth slows

Average UK house prices increased by 2.6% in the 12 months to September, slowing from 3.1% growth in the year to August, the Office for National Statistics (ONS) said.

Average house prices increased to £293,000 (2.0% annual growth) in England, £209,000 (2.7%) in Wales and £194,000 (5.3%) in Scotland in September.

The average house price in Northern Ireland was £193,000 in the third quarter of 2025, up by 7.1% annually.

The English region with the highest house price inflation in September was Yorkshire and the Humber, at 4.5%.

Annual house price inflation in England was weakest in London. House prices in London fell by 1.8% on average in the 12 months to September.

The average private rent in the UK was £1,360 per month in October, the ONS said – £65 (5.0%) higher than 12 months earlier.

ONS head of housing market indices Aimee North said: ”UK annual house price inflation slowed in September with the average UK house price now around £272,000.

“The Yorkshire and the Humber was the English region with the highest house price inflation while the regions with the lowest annual inflation are in the south of England. London is the only region showing an annual fall again.

“The rental market continues to cool, with UK annual inflation easing for the 10th consecutive month.”

The house and rental price figures were released as the ONS also said that Consumer Prices Index (CPI) inflation slowed to 3.6% in October, from 3.8% in September. Some commentators suggested this could pave the way for a Bank of England base rate cut soon, easing costs for some mortgage borrowers.

Sarah Coles, head of personal finance, Hargreaves Lansdown, said the below-CPI inflation increase in house price rises is “difficult news for homeowners, especially those who plan to downsize and cash in on as much property equity as possible”.

She added: “However, it’s a real positive for first-time buyers. If they have a competitive savings account, it will be outstripping house price inflation, making it easier for them to build a deposit.”

David Hollingworth, associate director at L&C Mortgages, said: “Today’s figures are unlikely to dampen hopes of a base rate cut in December, despite remaining well above the Bank of England’s inflation target.”

He added: “The growing belief of a cut coming sooner than previously anticipated has already seen mortgage rates improving. Mortgage lenders have been quick to pass on the improved cost of funds and there’s been successive rounds of fixed rate cuts by most major lenders.”

Iain McKenzie, chief executive of the Guild of Property Professionals said: “Affordability should improve gradually, particularly if borrowing costs begin to edge down in the coming quarters.”