The latest data from Lloyds Banking Group indicates that UK house prices slipped by 0.4% in August compared to the same period last year, marking the first annual decline since November 2023. On a monthly basis, prices dropped 0.2%, bringing the average property value to £298,468 as elevated borrowing costs and cautious sentiment among both buyers and sellers continue to dampen housing market activity.

Released on 7 September, the Lloyds House Price Index highlights the strain on affordability stemming from persistent mortgage rate pressures. As of that date, the average interest rates for two-year and five-year fixed residential mortgages stood at 5.63% and 5.68% respectively, both exceeding levels recorded at the beginning of the year. Andrew Asaam, head of home buying at Lloyds Bank, noted that sellers are reluctant to accept offers below their expectations, while some potential buyers are adopting a wait-and-see approach, leading to a reduction in transaction volumes. He anticipates that the market will remain subdued in the coming months, though growth in wages and resilience in employment could provide some support to demand.

Regional performance shows clear divergence. Property prices in the South East of England fell by 1.6% year-on-year, and Greater London saw a decline of 1.5%. In contrast, Northern Ireland recorded a substantial increase of 6.9%, with Scotland also posting a notable gain of 3.5%. Despite the national average turning negative on an annual basis, August prices were still 0.2% higher than at the start of the year. The current decline is relatively modest and runs alongside persistent regional variations. The index, previously known as the Halifax House Price Index, was renamed the Lloyds House Price Index in July 2026, with its methodology remaining unchanged.