UK house prices were unchanged in September as higher mortgage rates and wider economic uncertainty continued to constrain activity, according to the latest Lloyds House Price Index.

The average property price edged up from £298,395 in August to £298,441, but the monthly change rounded to 0.0%. Annual house price growth was also 0.0%, while prices were 0.2% lower on a quarterly basis.

The flat September reading followed a 0.3% monthly fall in August and leaves average prices below their February 2026 peak of £301,051.

Andrew Asaam, mortgages director at Lloyds, said the market had proved resilient despite higher mortgage rates, which had been driven by changing expectations for the future path of Bank Rate.

He said: “For now, the housing market appears to be balancing buyer caution with continued underlying demand.

“While higher mortgage rates and wider economic uncertainty are encouraging some people to take a more measured approach, new enquiries from prospective buyers are now at their highest since February.

“That should help sustain activity in the near term, with any movement in house prices likely to remain modest.”

AFFORDABILITY PRESSURES

Separate activity data underline the subdued backdrop. UK residential transactions fell 1.5% in August on a seasonally adjusted basis, while Bank of England figures showed mortgage approvals for house purchases declining 1.8% to 54,918 — 16% below their level a year earlier.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “House price growth continues to slow as economic uncertainty caused by the conflict in the Middle East continues.

“The high cost of fuel and rising energy bills, combined with uncertainty surrounding the upcoming Budget, as well as the prospect of higher mortgage payments, are all giving buyers reason to pause.

“While average two and five-year fixed rate mortgages have risen to almost 6%, there are options below that level.

“Borrowers coming off fixed rates of around 1% will be hit with a significant payment shock when they remortgage, so it is important to speak to a whole-of-market broker who will explore the options available to you.”

Ian Futcher, financial planner at Quilter, said affordability, confidence and borrowing costs were all putting pressure on the market.

He said: “The forthcoming Budget is adding another layer of uncertainty, with some buyers choosing to sit on their hands until there is greater clarity on the government’s tax and housing policy agenda.

“When purchasing a home is one of the biggest financial decisions a person will ever make, uncertainty alone can be enough to delay a move by weeks or even months.

“While these pressures do not guarantee falling house prices, they do act as a significant brake on demand and limit the potential for strong growth in the market.”

REGIONAL DIVIDE WIDENS

The headline UK figure masks substantial regional differences. Northern Ireland recorded the strongest annual growth at 7.4%, taking its average property price to a record £231,917. Scotland was up 3.4% at £223,330, while Wales recorded growth of 1.2% to £231,287.

In England, the North East led with annual growth of 2.4%, followed by the North West at 1.9%. By contrast, Greater London recorded the largest fall, down 2.2% to £531,548, while the South East declined 2.1% and Eastern England fell 1.6%.

The average UK first-time buyer property price was broadly unchanged at £236,779. Lloyds said a typical 2.5% deposit at that price would amount to £5,919, although full details of the government’s proposed Your First Home scheme are not expected until the Budget.

Tomer Aboody, director of specialist lender MT Finance, said: “September’s lack of movement in pricing comes as no surprise.

“It is also important to put into perspective that any fall in pricing comes from a position of many years of increases in values, putting home ownership out of reach of many aspiring buyers.”