RismadarVoice Reporters
September 7, 2026
British house prices recorded their first annual decline in nearly three years in August, as higher borrowing costs and economic uncertainty caused some potential buyers to delay property purchases, according to data from Lloyds.
The Lloyds house price index showed that property prices fell by 0.4 per cent in August compared with the same period last year, marking the first annual drop since November 2023. The figure was below economists’ expectations of a 0.2 per cent increase in a Reuters poll.
Every month, house prices declined by 0.2 per cent in August, against forecasts of a 0.1 per cent rise. July’s initial growth estimate of 0.1 per cent was revised down to a 0.1 per cent decline.
Andrew Asaam, mortgages director at Lloyds, said the housing market had faced increasing pressure in recent months due to the impact of global events on inflation and borrowing costs.
He said there had not been a major wave of sellers reducing prices, but more homeowners were choosing to delay sales while some buyers were waiting for clearer market conditions.
The decline comes amid continued pressure from higher mortgage rates, with analysts expecting typical two-year fixed mortgage rates to rise further from 4.8 per cent in July to nearly 5 per cent.
Ruth Gregory, deputy chief economist at Capital Economics, said she expected house prices to remain weak for the rest of the year, forecasting that prices would largely remain stable and end the fourth quarter of 2026 around 1.5 per cent higher than the previous year.
However, separate figures from Nationwide Building Society showed a different trend, with house prices rising by 1.6 per cent annually in August and increasing 0.2 per cent during the month.
Official figures from the Office for National Statistics also showed that UK house prices increased by 2.0 per cent in the 12 months to June, although this represented a slowdown from the 3.0 per cent growth recorded in the previous period.
The latest data highlights the uncertainty facing Britain’s housing market as buyers and sellers continue to respond to changing interest rates and wider economic conditions.
