Â
Mortgage rates have climbed to their highest level in nearly three years, house prices have stalled, and buyers have more homes to choose from than they did a year ago. This is what the evidence says, and what it means if you are buying or selling a home in England and Wales this autumn.
Published 15 October 2026. Information as published up to 14 October 2026.
At the turn of the year, most forecasters expected 2026 to be a year of steady recovery for the housing market. The Bank of England had cut its base rate four times during 2025, mortgage deals priced below 5 per cent were plentiful, and Rightmove was predicting a 2 per cent rise in asking prices. That is not the year that has unfolded.
The conflict in the Middle East, which began in late February, has driven energy prices sharply higher, pushed inflation to 3.1 per cent and reversed expectations for interest rates. Instead of the rate cuts that buyers were counting on in the spring, financial markets are now pricing in a rise in the Bank of England’s base rate, possibly as soon as next month. Lenders have repriced accordingly.
The result is a market that has not collapsed, but has shifted in favour of buyers who are able to proceed. Prices are broadly flat nationally and edging lower across much of southern and eastern England. Realistically priced homes are still finding buyers, while the latest relisting data suggests that many homes are returning to the market at a lower price.
Â
ENGLAND AND WALES: WHICH RULES APPLY? The market data in this article covers the UK as a whole or its individual regions. Some of the policy measures discussed apply in England only, and we identify them as such. Stamp duty land tax applies to purchases in England; in Wales, buyers pay Land Transaction Tax, which is set by the Welsh Government. The Your First Home scheme has been announced for England, and the high value council tax surcharge applies to residential property in England. |
Here is where things stand, and what we think you should do about it.
Where Things Stand: Mid October 2026
Indicator | Latest position |
Bank of England base rate | 3.75%, held on 17 September by six votes to three; the three dissenting members voted for an increase to 4% |
Next Bank of England decision | 5 November 2026 |
Average two-year fixed mortgage rate | 5.98% on 5 October, up from 4.83% in January (Moneyfacts) |
Average five-year fixed mortgage rate | 6.00% on 5 October, up from 4.91% in January (Moneyfacts) |
Consumer price inflation | 3.1% in August; the Bank of England projects slightly above 4% in early 2027, based on energy prices in mid September |
Nationwide average house price | £274,251 in September, up 0.8% on a year earlier |
Lloyds average house price | £298,441 in September, unchanged on a year earlier |
East Anglia (Nationwide) | £272,119 in the third quarter, down 0.7% on a year earlier, the weakest region in the UK |
Supply and demand (Zoopla) | Four weeks to 20 September: 5% more homes for sale and 9% fewer sales agreed than a year earlier |
Autumn Budget | 28 October 2026 |
Full source details, with publication dates and links, are listed at the end of this article. Information as published up to 14 October 2026.
House Prices: Stalled, Not Collapsing
The two major lender indices published at the start of October tell a consistent story. Nationwide reported that annual house price growth halved in September to 0.8 per cent, down from 1.6 per cent in August and the weakest rate since December 2025. Prices fell by 0.2 per cent during the month itself. The Lloyds index, formerly the Halifax index, recorded no change in September, either monthly or annually, with the average property valued at £298,441. In August, Lloyds had recorded the first annual fall in prices since November 2023.
The Royal Institution of Chartered Surveyors paints a slightly gloomier picture. Its September survey recorded a house price net balance of minus 32 per cent, compared with minus 28 per cent in August. A net balance does not measure how far prices have moved. It is the difference between the proportion of surveyors reporting rising prices and the proportion reporting falling prices, so a negative reading means that falls are being reported more widely than rises. Surveyors expect that pattern to continue over the next three months, but the twelve-month expectations balance now stands at zero, which points to a broadly flat trend over the year ahead.
Asking prices tell a similar story. Rightmove reported that the average asking price of newly listed homes rose by 0.7 per cent in September to £367,440, the first monthly increase since May, but remained 0.8 per cent lower than a year earlier. In August, Rightmove abandoned its forecast of a 2 per cent rise for 2026, and it now expects asking prices to finish the year somewhere between unchanged and 2 per cent lower.
None of this describes a crash. It describes a market in which the upward pressure on prices has largely disappeared and buyers who are able to proceed have greater negotiating strength.
A Two-Speed Country, and Where East Anglia Sits
National averages conceal very different local markets. Nationwide’s figures for the third quarter show Northern Ireland leading the UK with annual growth of 5.9 per cent, followed by the North West at 3.9 per cent, and Scotland and the North of England at 3.3 per cent each. Across southern England, prices were down 0.1 per cent overall, with London the only southern region to record any annual increase, at 0.4 per cent. For readers in Wales, Nationwide recorded annual growth of 0.7 per cent and Lloyds 1.2 per cent.
East Anglia, which in Nationwide’s definition covers Norfolk, Suffolk, Cambridgeshire and Peterborough, was the weakest performing region in the whole of the UK, with prices down 0.7 per cent on a year earlier and an average of £272,119. The Lloyds index, which uses a wider Eastern England region, recorded an annual fall of 1.6 per cent to £330,151, behind only Greater London at minus 2.2 per cent and the South East at minus 2.1 per cent.
Zoopla’s data points the same way. Across the East of England, the number of sales agreed in the four weeks to 20 September was 14 per cent lower than a year earlier, the second steepest fall of any region after the West Midlands.
Feedback from surveyors in our own region reinforces the point. Responding to the latest Royal Institution survey, one Norwich surveyor observed that the time it takes to sell a home depends heavily on the asking price set at the outset. Another, working in the Norwich auction market, reported an unusual number of instructions from owners hoping to exchange contracts before the Budget in case capital gains tax is increased.
Price for the market you have, not the market you had in the spring.
Mortgage Rates: The Real Story of 2026
If there is a single reason why the market has lost momentum, it is the cost of borrowing. In January, Moneyfacts recorded the average two-year fixed rate at 4.83 per cent and the average five-year fixed rate at 4.91 per cent. By 5 October, the average two-year rate had reached 5.98 per cent, its highest level since December 2023, and the average five-year rate had reached 6 per cent for the first time in roughly three years.
The speed of the change has been remarkable. According to Moneyfacts, nearly 1,500 fixed rate products were priced below 5 per cent at the start of September. By 5 October, just nine remained, excluding deals available only for lending in Northern Ireland. Major lenders including Barclays, HSBC, Lloyds Bank, Nationwide, Santander and TSB each raised selected rates several times during September.
The cause lies in the wholesale markets on which lenders price their fixed rate deals. Higher oil prices have revived fears about inflation, and the yield on ten-year government bonds rose in late September to its highest level since 2007. Market pricing reported at the end of September implied a probability of around 80 per cent that the Bank of England would raise its base rate in November, with roughly four quarter point increases priced in by the middle of 2027.
Those figures describe what financial markets were pricing at the time. They are not forecasts by the Bank of England. The Bank’s own September minutes recorded that median expectations among the market participants it surveys implied a prolonged hold, and that elevated risk premiums were contributing to the rise in longer dated market rates. The Governor, Andrew Bailey, has also cautioned that a rise is not inevitable. For borrowers, however, the distinction offers limited comfort, because lenders price their fixed rate products from those market rates.
To illustrate the effect, on a £250,000 repayment mortgage over 25 years the monthly payment at January’s average two-year rate of 4.83 per cent would be around £1,437. At October’s average of 5.98 per cent, it rises to around £1,608. That is roughly £171 more every month, or more than £2,000 a year, for the same loan. The illustration shows the monthly payment during the fixed period only; it excludes arrangement fees and other costs, and it does not assume that either rate would apply for the full 25 years.
There has been a modest reprieve in the last fortnight. Moneyfacts reported this week that some lenders, including Yorkshire Building Society, have trimmed selected fixed rates, with the lowest two-year deal for home movers now 4.83 per cent for those borrowing no more than 60 per cent of the property’s value, albeit with a product fee of £1,495. Borrowers with smaller deposits will pay considerably more, and the lowest headline rate is not always the cheapest deal once fees are taken into account. Compare the overall cost and the suitability of each product, ideally with a mortgage adviser.
The impact on activity is clear. Bank of England figures show 54,918 mortgage approvals for house purchase in August, 16 per cent fewer than a year earlier. Analysis published by Yorkshire Building Society found that mortgage applications from existing homeowners looking to move fell by 10.2 per cent between late June and late September compared with the same period in 2025, while applications from first-time buyers fell by only 3.5 per cent. Home movers, who have the option of staying put, are the buyers who have stepped back.
More Choice, Fewer Deals
Higher borrowing costs have not stopped people putting their homes on the market. The Royal Institution survey recorded a positive balance for new instructions in September for the first time since mid-2025. Zoopla reports that there are 5 per cent more homes for sale than a year ago, while sales agreed are running 9 per cent lower.
Zoopla’s relisting data is particularly revealing. A quarter of homes newly listed in September had already been on the market within the previous twelve months, and six in ten of those returned at a lower asking price. The figures do not tell us why each seller withdrew, but they do show that a significant number of homes are coming back to the market at a reduced price.
Demand has also softened again. The Royal Institution’s new buyer enquiries balance fell to minus 22 per cent in September, from minus 18 per cent in August. Since March the balance had become steadily less negative, meaning that the decline in enquiries was easing; September was the first month in that period in which the indicator deteriorated again. Zoopla now expects house price growth to drift down towards 0.5 per cent by the end of the year, with total sales of around 1.1 million in 2026, compared with 1.2 million last year.
The Budget on 28 October: What Is and Is Not on the Table
The new Chancellor, John Healey, delivers his first Budget on 28 October. Uncertainty about its contents is clearly weighing on the market; surveyors in many regions of England reported clients waiting to see what it contains before committing.
On 27 July, the Prime Minister, Andy Burnham, was reported as ruling out any change to, or abolition of, stamp duty at this Budget. That statement concerns stamp duty land tax, which applies in England; Land Transaction Tax in Wales is a matter for the Welsh Government. A political statement is not a legal guarantee, and wider property taxation has not been ruled out. There has also been persistent speculation about capital gains tax, which would be relevant to anyone selling a second home, an investment property or any home that does not qualify for full private residence relief.
Owners of higher value homes in England should also note that the high value council tax surcharge, announced under the previous Chancellor, will apply to residential property worth £2 million or more, based on 2026 values, from April 2028.
Do not base your purchase plans on speculation about tax relief.
Assess affordability under the rules currently in force, and review any confirmed changes with your advisers before committing. The one housing measure we know will feature in the Budget is the new Your First Home scheme.
Your First Home: Read the Detail Before You Commit
Announced on 26 September, Your First Home is expected to offer first-time buyers in England a government-backed equity loan of 20 per cent of the purchase price, with a deposit of just 2.5 per cent and an initial interest-free period. It is intended to apply only to new build homes bought from developers who have signed up to the scheme, with a household income cap and local property price caps. The government has said that the detail will be set out in the Budget, and it was reported at the time of the announcement that pre-registration would open by the end of 2026. Pre-registration is not the same as the scheme being available for purchases.
The scheme has been announced, but the final eligibility rules, repayment terms, charges and implementation timetable should be checked once they are published. Buyers should not make a binding commitment on the assumption that they will qualify.
For first-time buyers who can afford mortgage repayments but cannot save a large deposit, the scheme may open a door that would otherwise stay closed. It nevertheless deserves careful scrutiny. In January 2022, the House of Lords Built Environment Committee concluded that the previous Help to Buy scheme had raised prices by more than the value of its subsidy in the areas where help was most needed.
A smaller deposit does not necessarily mean a better value purchase. Compare the price with similar resale properties nearby, and consider the risk that any premium paid for a new home may not be recovered when you sell. An equity loan is borrowing, not a discount. Under the former Help to Buy arrangements, the amount repayable generally moved with the property’s value, rising if the value rose and falling if it fell. Buyers should not assume that the new scheme will use identical repayment terms.
Instruct a conveyancer who has no financial relationship with the developer, and ask them to confirm which consumer code and warranty arrangements protect your purchase. Where the New Homes Quality Code applies, you are entitled to inspect the property before completion, or to appoint a suitably qualified inspector to do so on your behalf. Do not assume that every new build purchase carries identical protections.
Reform of the Buying and Selling Process
In June, the government published its roadmap for reforming how homes are bought and sold. It proposes mandatory sales packs containing key information at the point of listing, digital property logbooks, wider use of digital identity checks and electronic signatures, and, in time, binding conditional contracts that would commit buyers and sellers much earlier, with financial penalties for withdrawing without good reason.
The government’s case for reform is stark. It says that once an offer has been accepted, a purchase takes around 120 days on average to complete, and that around one transaction in three falls through. The government anticipates that most of the measures will apply in England, Wales and Northern Ireland, although the final extent will be settled through legislation.
The roadmap does not itself introduce a universal legal requirement for sales packs or binding conditional contracts. Those measures depend on further implementation and legislation, and binding contracts will only follow once sales packs are established. Earlier voluntary measures and guidance, including work with industry on sales pack information that can be provided upfront now, are intended to improve the information available before a sale is agreed.
Sellers do not need to wait. Much of the legal paperwork a sales pack would contain, from title documents and planning records to leasehold information and completed property forms, can be prepared now. In a market where buyers have choice, a seller who can provide that information from the first day of marketing is better placed to keep a sale together.
If You Are Selling
ACTIONS FOR SELLERS ▪    Price against current local evidence. Take advice from more than one agent, look at sold prices rather than asking prices, and be wary of any valuation that appears designed to win your instruction rather than secure a sale. ▪    Get it right first time. Six in ten homes relisted in September returned at a lower asking price, according to Zoopla. ▪    Instruct your conveyancer when you list, not when you accept an offer. Identity checks, review of your title and the property information forms can all be completed before a buyer is found. ▪    Gather your paperwork now. Planning permissions and building regulation approvals for any alterations, guarantees and warranties, and, if your property is leasehold, the management information your buyer’s lender will require. ▪    Understand your chain. Be honest with your agent and your buyer about the position of your own onward purchase. ▪    Review your strategy if serious interest does not follow. Discuss with your agent whether the price, the presentation or the marketing needs to change. |
If You Are Buying
ACTIONS FOR BUYERS ▪    Speak to a mortgage adviser early. Obtain an agreement in principle before making offers. Once a purchase is agreed, progress the full application promptly, and confirm when the mortgage offer expires, what conditions remain outstanding and whether a different product can be selected before completion. ▪    Compare the overall cost, not just the headline rate. Arrangement fees, incentives and early repayment charges can make a product with a higher rate the better choice. ▪    Stress test your budget. Could you still afford your payments if rates were one percentage point higher when your fixed rate ends? ▪    Use your negotiating position, but look at the whole picture. With more homes for sale and fewer active buyers, surveyors report that offers below the asking price are being accepted in many areas. A lower price does not, on its own, make a move affordable. ▪    Base your plans on the rules in force today. Do not rely on speculation about stamp duty or any other tax relief. ▪    Commission an appropriate survey. A lower price is no bargain if the property needs work you have not budgeted for. ▪    Have your deposit and its source documented before you make an offer. Your conveyancer is required under the money laundering regulations to make enquiries into the source of your funds, and early preparation avoids delay. |
CAUTION: WATCH YOUR MORTGAGE OFFER EXPIRY DATE Mortgage offers commonly remain valid for three to six months, but check the expiry date of your own offer. If your transaction is delayed and your offer expires, you may need to reapply at whatever rates are then available, which in the current market could be materially higher. Agree a realistic timetable with your conveyancer at the outset, and tell them immediately if your lender’s deadline is approaching. |
HIGH RISK: FRAUD DOES NOT SLOW DOWN WHEN THE MARKET DOES Criminals target home buyers and sellers by intercepting emails and supplying false bank details at the moment money is about to move. If you receive an email, text or message telling you that your conveyancer’s bank details have changed, treat it as fraudulent until you have confirmed otherwise by telephone, using a number you already hold and not one provided in the message. Never transfer your deposit or completion funds without that confirmation. |
Key Dates for Your Diary
Date | What happens |
21 October 2026 | Official UK House Price Index for August published by HM Land Registry |
28 October 2026 | Autumn Budget, expected to set out the detail of Your First Home |
5 November 2026 | Bank of England interest rate decision |
6 November 2026 | Lloyds House Price Index for October |
12 November 2026 | Royal Institution of Chartered Surveyors residential survey for October |
By the end of 2026 | Pre-registration for Your First Home reported to open; this is not the same as the scheme being available for purchases |
The Bottom Line
This is not 2008, and it is not the frenzy of 2021. It is a market that rewards realism, on both sides of the transaction.
For sellers, the practical response is to price against current local evidence, prepare the legal paperwork early and review the strategy if serious interest does not follow. An ambitious asking price may prolong the marketing period, particularly where buyers have a wide choice.
For buyers, improved choice can create room to negotiate, but a lower purchase price does not automatically make a move affordable. Consider the price, deposit, mortgage rate, fees, likely repair costs and monthly commitments together. Keep the mortgage timetable under review, and do not allow a scheme, a deadline or a sales pitch to replace a properly tested decision.
Whatever the Budget contains, make your decision on the basis of your own circumstances, confirmed rules rather than speculation, sound independent advice and the market as it actually is.
This article is intended as general information only and does not constitute legal or financial advice. The figures quoted reflect published data available as at 14 October 2026, and the market, the interest rate outlook and the policy position may change rapidly. Please seek independent legal and financial advice before making any decision to buy or sell a property.
Sources
All sources accessed between 7 and 14 October 2026.
Interest rates and inflation
- Bank of England, Monetary Policy Summary and minutes of the Monetary Policy Committee meeting, 17 September 2026. https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2026/september-2026
- Trading Economics, UK gilt yields remain near 19-year highs (market pricing of Bank Rate), 29 September 2026. https://tradingeconomics.com/united-kingdom/government-bond-yield/news/587694
- Trading Economics, UK gilt yields ease slightly but stay near 19-year highs (Governor’s comments), September 2026. https://tradingeconomics.com/united-kingdom/government-bond-yield/news/583100
Mortgage rates and lending
- co.uk, Disastrous news for borrowers as average five-year fixed mortgage rate hits 6%, 5 October 2026. https://moneyfactscompare.co.uk/news/mortgages/avg-5-year-fixed-rate-at-6pc/
- co.uk, This week’s top mortgage deals explained (including Yorkshire Building Society analysis), updated 14 October 2026. https://moneyfactscompare.co.uk/news/mortgages/best-uk-residential-mortgage-rates-this-week/
- Mortgage Solutions, Product count at highest level since 2007 and pricing stays below 5% in 2026, Moneyfacts finds, 12 January 2026. https://www.mortgagesolutions.co.uk/news/2026/01/12/product-count-at-highest-level-since-2007-and-pricing-stays-below-5-in-2026-moneyfacts-finds/
House prices and market activity
- Nationwide Building Society, House Price Index, September 2026, with quarterly regional statistics for the third quarter, October 2026. https://www.nationwide.co.uk/media/hpi/download/w32q3-ocrlk-waaep-7jzvj-l93uw
- Lloyds and S&P Dow Jones Indices, Lloyds House Price Index, September 2026 (including Bank of England approvals data), 7 October 2026. https://www.lloydsbank.com/assets/media_centre/pdf/september-2026-lloyds-house-price-index.pdf
- Lloyds, House Price Index release calendar, accessed October 2026. https://www.lloydsbank.com/media-centre/house-price-index.html
- Royal Institution of Chartered Surveyors, UK Residential Market Survey, September 2026, October 2026. https://www.rics.org/content/dam/ricsglobal/documents/market-surveys/RICS-UK-Residential-Market-Survey_September-2026.pdf
- Mortgage Solutions, Quarter of homes relisted as buyers manoeuvre costs (Zoopla House Price Index), 30 September 2026. https://www.mortgagesolutions.co.uk/mortgage-news/2026/09/30/quarter-of-homes-relisted-as-buyers-manoeuvre-costs-zoopla/
- JM Financial, UK House Price Index up 0.7% on month in September (Rightmove), 21 September 2026. https://www.jmfinancialservices.in/market-news-and-insights/1733256
- Estate Agent Today, Rightmove warns of price falls (forecast downgrade), August 2026. https://www.estateagenttoday.co.uk/breaking-news/2026/08/rightmove-warns-of-price-falls-as-burnham-bounce-backfires/
- HM Land Registry, UK House Price Index summary: July 2026 (including next release date), 16 September 2026. https://www.gov.uk/government/statistics/uk-house-price-index-for-july-2026/uk-house-price-index-summary-july-2026
Budget, tax and policy
- UK Tax Tools, Autumn Budget 2026: date confirmed, accessed October 2026. https://uktax.tools/autumn-budget-2026/
- Mortgage Professional, Prime Minister confirms no overhaul of property tax at Autumn Budget, July 2026. https://www.mpamag.com/uk/news/general/stamp-duty-is-here-to-stay-burnham/583993
- Welsh Government, Land Transaction Tax overview, accessed October 2026. https://www.gov.wales/land-transaction-tax-overview
- HM Revenue and Customs, Tax when you sell your home (private residence relief), accessed October 2026. https://www.gov.uk/tax-sell-home
- HM Government, High Value Council Tax Surcharge, accessed October 2026. https://www.gov.uk/government/publications/high-value-council-tax-surcharge/high-value-council-tax-surcharge
- HM Government, New first-time buyer scheme to be confirmed at Budget, 26 September 2026. https://www.gov.uk/government/news/new-first-time-buyer-scheme-to-be-confirmed-at-budget
- ITV News, New Your First Home scheme to help first time buyers get on the ladder (pre-registration timing), 26 September 2026. https://www.itv.com/news/2026-09-26/new-your-first-home-scheme-to-help-first-time-buyers-get-on-the-ladder
- HM Government, Help to Buy: equity loan (repayment terms), accessed October 2026. https://www.gov.uk/help-to-buy-equity-loan
- Mortgage Solutions, Home ownership schemes do not offer value for money and inflate prices, Lords report says (House of Lords Built Environment Committee, Meeting housing demand), 10 January 2022. https://www.mortgagesolutions.co.uk/news/2022/01/10/home-ownership-schemes-do-not-offer-value-for-money-and-inflate-prices-lords-report-says/
Consumer protection and reform
- New Homes Quality Board, The New Homes Quality Code, accessed October 2026. https://www.nhqb.org.uk/the-code/
- Ministry of Housing, Communities and Local Government, Home buying and selling reform roadmap, 19 June 2026. https://www.gov.uk/government/consultations/home-buying-and-selling-reform/outcome/home-buying-and-selling-reform-roadmap
