House prices rose in August according to Nationwide, but the market is still subdued: What does that mean for movers?

The latest UK house price figures continue to paint a mixed picture. Nationwide reported that prices rose by 0.2% month on month in August, with annual growth of 1.6%. Its report described both house prices and activity as subdued against an uncertain economic backdrop. https://www.nationwide.co.uk/media/hpi/reports/house-price-growth-remained-subdued-in-august

Another major index was weaker. The Lloyds House Price Index, previously published under the Halifax name, reported that prices fell by 0.2% in August and were 0.4% lower than a year earlier, its first annual decline since November 2023. https://www.lloydsbank.com/media-centre/house-price-index.html

The differences reflect the different mortgage datasets and methodologies used by the two indices. Taken together, however, they tell a reasonably consistent story. The market is not collapsing, but neither does it look particularly hot. Buyers remain price conscious and borrowing conditions have become more challenging again.

What the August figures actually tell us

Nationwide’s modest monthly increase was encouraging after a subdued summer, but a 0.2% rise is not evidence of a sudden return to strong house price growth.

Its report said that geopolitical uncertainty, higher energy costs and market interest rates had weighed on housing activity. Lloyds, meanwhile, described a market in which some sellers are reluctant to accept lower offers while some buyers are waiting to see how conditions develop.

That helps explain why prices can appear relatively stable even while activity slows. If sellers do not urgently need to move, they may simply decide not to accept an offer they consider too low. Buyers may also wait if they are uncertain about mortgage costs.

The result can be fewer transactions rather than dramatic movements in headline prices.

September’s Bank Rate decision matters to this picture

The mortgage backdrop has become slightly more challenging since the August house price reports were published.

On 17 September, the Bank of England voted by 6 to 3 to leave Bank Rate at 3.75%. Three members wanted an immediate increase to 4%. The Bank also said CPI inflation had risen to 3.1% in August and that risks to the inflation outlook were now more clearly tilted to the upside. Its decision is here: https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2026/september-2026

That is significant for the housing market because the debate earlier this year had focused heavily on when interest rates might fall. The immediate conversation has now shifted towards whether rates could eventually need to rise if energy driven inflation persists.

That does not mean a Bank Rate increase is certain. The six member majority still judged that keeping rates unchanged was appropriate. But it does mean buyers should be cautious about basing a purchase decision on an assumption that significantly cheaper borrowing is just around the corner.

Fixed mortgage rates have already moved higher

Mortgage lenders have not waited for Bank Rate to rise. Wholesale market rates increased in the run up to the September meeting, and lenders responded by repricing fixed mortgage deals.

Moneyfacts reported that NatWest, Santander, HSBC and Lloyds Bank were among the major lenders raising rates during September. On 17 September its data showed an average two year fixed rate of 5.83% and an average five year rate of 5.87%. Current Moneyfacts data can be found here: https://moneyfactscompare.co.uk/mortgages/fixed-rate-mortgages/

Individual borrowers may find rates well below those averages depending on their deposit, loan to value, circumstances and product choice. The important point is simply that financing conditions have moved in a less favourable direction since late summer.

What this means if you are buying

A subdued market can create opportunities for buyers, particularly where a property has been listed for some time or the seller genuinely needs to move.

The mixed house price data also gives buyers a reasonable basis for resisting the idea that values are rising rapidly everywhere. Local comparable sales and the level of competition for a particular property remain far more useful than one national headline.

At the same time, buyers need to think about both sides of the equation. Negotiating £5,000 off a property is useful, but the monthly mortgage payment matters too. If fixed rates move higher while negotiations drag on, part of the benefit of a lower purchase price could be offset by more expensive borrowing.

Being financially ready can therefore strengthen your position. An agreement in principle, clear deposit evidence and an understanding of your budget can all help when negotiating with a seller who values certainty.

What this means if you are selling

For sellers, the latest evidence argues for realistic pricing rather than panic.

Nationwide still recorded positive annual growth in August, while Lloyds recorded only a modest annual decline. Neither index suggests a dramatic national correction.

What they do suggest is a market where ambitious pricing can be harder to sustain. Buyers have become more sensitive to both asking prices and mortgage costs, so launching significantly above comparable properties may result in a home sitting on the market rather than generating a higher eventual sale price.

Good presentation, sensible pricing and an understanding of competing stock in your area may therefore matter more than trying to interpret every monthly national index.

Practical takeaways

The housing market currently looks more sideways than strongly rising or falling. The September Bank Rate decision does not fundamentally change that, but it does add another reason for buyers to remain focused on affordability.

For buyers, a quieter market may create negotiating opportunities, but waiting indefinitely for cheaper mortgages is not without risk. For sellers, realistic pricing is likely to matter in a market where buyers have become more cautious about both prices and monthly repayments.

If you are planning a move, Altura Mortgage Finance can help you understand what current mortgage pricing means for your budget, so your decision is based on the property and numbers in front of you rather than speculation about what rates or house prices may do next.

Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Think carefully before securing other debts against your home. The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK. Altura Mortgage Finance Limited is authorised and regulated by the Financial Conduct Authority. Firm Registration No: 827849 www.fsa.gov.uk/register/home.