Business · Economy · 12 hrs ago
UK house prices post biggest annual fall in three years
UK house prices fell 1.2% over the year to October, the biggest annual drop since October 2023, according to a Lloyds index.
The average home was valued at £296,285, down 0.6% from September.
Greater London, the south east and south west of England saw some of the biggest price falls.
Higher borrowing costs and household bills are making buyers more cautious, while the Bank of England raised its base rate by 0.25 percentage points to 4%.
About 87% of outstanding homeowner mortgages are fixed-rate, but 2.3 million fixed-rate deals are due to expire in 2027.
Lloyds expects housing conditions to stay subdued in the near term, but does not expect a sustained period of falling prices.
UK house prices fell 1.2% in the year to October, the steepest annual drop in three years, Lloyds said.
The average property price was £296,285, down £1,882, or 0.6%, from September.
Greater London, the south east and the south west of England recorded some of the biggest price falls, according to This is Money.
Lloyds said renewed inflation and higher borrowing costs were weighing on demand and household finances.
The Bank of England raised its base rate by 0.25 percentage points to 4%, its first increase in more than three years.
- Who
- UK homeowners and buyers. Lloyds reported the figures.
- What
- House prices fell 1.2% annually in October, their biggest annual drop in three years.
- When
- October 2026. The reports were published on November 6, 2026.
- Where
- The UK. Greater London, the south east and the south west of England had some of the biggest falls.
- Why
- Lloyds cited a challenging economic backdrop, renewed inflationary pressures and high borrowing costs.
This story does not have two clearly opposing sides.
UK house prices fell 1.2% year on year and 0.6% from September, according to Lloyds.
The Bank of England raised its base rate by 0.25 percentage points to 4%.
The Evening Standard and This is Money published reports on the house-price figures.
- Annual price change
- Down 1.2% in October
- Average UK property price
- £296,285
- Monthly price change
- Down £1,882, or 0.6%, from September
- Biggest annual drop since
- October 2023
- Bank of England base rate
- Increased by 0.25 percentage points to 4%
3 sources
What people are saying
Housing demand is currently being tested by a challenging economic backdrop.
Renewed inflationary concerns and yesterday’s increase in the base rate will continue to weigh on consumer confidence, particularly as households remain mindful of the cost of living.
The housing market increasingly feels like it is running up the down escalator.
Buyers have more choice, borrowing costs are squeezing budgets and overpriced properties are finding it increasingly difficult to attract serious interest.