7 September 2026
If you are covering the latest Lloyd's house price index, please see the following comment from Ian Futcher, financial planner at Quilter:
“Lloyds’ latest House Price Index shows UK house prices fell by 0.2% in August, leaving the average property worth £298,468. On an annual basis, prices were down 0.4%, marking the first year-on-year decline since November 2023.
“Clearly, stretched affordability and an uncertain economic background has had a negative impact on house prices and unfortunately recent volatility in bond markets has the potential to put further pressure on mortgage rates. Swap rates have risen sharply in recent days and some lenders have already begun adjusting pricing in response. For first-time buyers who have spent months building a deposit and carefully calculating what they can afford, sudden shifts in mortgage rates can pull the rug from under their feet just as they are preparing to make a move. This uncertainty is likely one factor behind the softer market conditions now emerging.
“Attention will now turn to the Bank of England’s next decision on 17 September. While few expect policymakers to make any dramatic moves, the accompanying commentary could prove just as important as the decision itself. Markets will be looking for clues on inflation and the future path of interest rates, with any shift in expectations likely to feed through to mortgage pricing.
“Demand for homeownership remains strong, but buyers and sellers alike benefit from stability. When mortgage costs move around quickly, buyers can become more hesitant and transactions can take longer as finances are reassessed. The latest figures already point to a cooling in activity, with mortgage approvals falling and transaction volumes remaining subdued. If markets settle, housing activity should remain supported. However, if volatility persists, affordability pressures are likely to keep a lid on both transactions and house price growth, particularly among those trying to get onto the property ladder for the first time.”
