The Lloyds House Price Index showed that UK house prices fell by 1.2% year-on-year in October 2026, a sharper drop than market expectations of a 0.3% decline and following a 0.1% fall in September. This was the steepest annual decrease since October 2023. On a monthly basis, prices declined by 0.6%, compared with a 0.1% drop in September, bringing the average property price down to £296,285 from £298,167.
Lloyds Mortgages Director Andrew Asaam said that renewed inflationary pressures, partly driven by the conflict in the Middle East, are keeping borrowing costs elevated and straining household finances, leading to increased caution among buyers. He noted that market conditions are likely to remain subdued in the near term, but a prolonged, sustained fall in house prices is not anticipated.
Regionally, Northern Ireland recorded the strongest annual growth at 4.4%, followed by Scotland at 2.8%, the North West at 2.2%, and the North East at 2%. By contrast, Greater London saw the largest annual decline, with prices down 3.1%.
