House prices are going down on one national measure and still going up on two others, and beneath all three the country has split along a line that is not where most people would draw it.
Whether prices are falling depends on which index you read and, far more usefully, on where you own.
In short
- Lloyds’ August 2026 index put the average UK home at £298,468, down 0.4% on the year, the first annual fall since November 2023.
- Nationwide and the official UK House Price Index still show growth, at 1.6% in August and 1.4% in July.
- In Lloyds’ regional figures for England, Scotland and Northern Ireland, four areas rose over the year, six fell and the West Midlands was flat.
- Mortgage approvals and transactions have fallen, giving buyers more room to negotiate in the weaker regions, although buyer demand in the August RICS survey was less weak than in July.
What the Lloyds house price index said
The Lloyds House Price Index for August 2026 recorded a monthly fall of 0.2%, following a 0.1% fall in July. The standardised average price moved from £299,153 to £298,468. On a quarterly basis prices were down 0.1%, and the annual figure came in at minus 0.4%, the first annual fall since November 2023.
Two qualifiers matter before anyone reads that as a slide. Prices are still up 0.2% since the start of 2026, so the annual fall reflects a strong August 2025 dropping out of the comparison rather than a collapse this summer.
And Lloyds puts the average house price around 25% above where it stood at the end of 2019, after a rate cycle that took Bank Rate from 0.1% in March 2020 to 5.25% in August 2023 and back to 3.75%. Against that, a fall of 0.4% is small, and nowhere near a correction.
One naming point is worth knowing, because it makes the historic data look discontinuous when it is not. From July 2026 the Halifax House Price Index became the Lloyds House Price Index. The methodology did not change, and the series still runs back to January 1983.
Two other indices still show growth
This is the part the headlines left out. Nationwide published its August index on 1 September 2026 with annual growth broadly stable at 1.6% and prices up 0.2% on the month. That is the same month Lloyds measured, and it points the other way.
The official UK House Price Index for July 2026, first published on 16 September, put the average at £273,000 with annual growth of 1.4% on a provisional estimate. It runs behind the lender indices because it uses completed transactions recorded by HM Land Registry and the equivalent Scottish and Northern Irish registries, but it is the only one of the three that captures cash purchases as well as mortgaged ones.
Across Great Britain, cash purchases averaged £258,735 in July against £281,666 for mortgaged ones.
The three do not agree because they are not measuring the same thing. Lloyds and Nationwide each build their index from their own mortgage approvals, so each reflects a different slice of borrowers, and neither sees a cash buyer at all.
Lloyds’ £298,468 average and the official index’s £273,000 average differ by more than £25,000 for the same reason. Comparing the levels across indices tells you nothing. What each index can tell you is its own direction, and on that Lloyds is currently the outlier of three.
On the latest figures, the reasonable reading is that prices have turned negative on the Lloyds index while Nationwide and the official index still show growth, not that prices are falling across the board. For where forecasters expect prices to go from here, see our comparison of house price forecasts for 2027.
House prices rose in four of eleven regions
The regional table is where the national number stops being useful, and it is worth going to the table in the full August press pack rather than the summary. Lloyds bases these regional figures on the most recent three months of approved mortgage data, so they are smoother than the headline.
Across England, Scotland and Northern Ireland, four rose, one was flat and six fell.
| Nation or region | Average price, August 2026 | Annual change |
|---|---|---|
| Northern Ireland | £231,245 | +6.9% |
| Scotland | £223,437 | +3.5% |
| North East | £184,370 | +2.7% |
| North West | £248,675 | +2.0% |
| West Midlands | £260,286 | 0.0% |
| East Midlands | £244,959 | -0.2% |
| Yorkshire and Humber | £217,085 | -0.3% |
| South West | £298,807 | -1.2% |
| Eastern England | £331,410 | -1.2% |
| Greater London | £534,177 | -1.5% |
| South East | £381,729 | -1.6% |
Northern Ireland is at an all-time high. The fallers are not all southern, which is where the easy version of this story breaks. Yorkshire and the Humber and the East Midlands both slipped. Anyone reading the month as a simple North against South split would put Yorkshire on the wrong side of the line.
There is still a pattern, and it is about price level rather than compass direction. The four largest falls are the four most expensive regions on the list: Greater London at £534,177, the South East at £381,729, Eastern England at £331,410 and the South West at £298,807.
Affordability explains the extremes cleanly. It does not explain everything, because Yorkshire and the Humber has the second lowest average price of the eleven and still slipped.
Where the indices can be compared, they point the same way, even though the exact figures differ. Nationwide had Northern Ireland as its best performing region at 8.6% annual growth in the second quarter, and the official index put Northern Ireland at 9.2% over the same quarter. Three different samples, three different methodologies, the same leader.
We look at how gaps like these translate into buying decisions in our guide to where to invest in UK property in 2026.
Fewer mortgage approvals, weaker buyer demand
Bank Rate has been held at 3.75% since 18 December 2025, so nothing that happened in August was a Bank Rate event. What changed is the cost and availability of mortgage finance, and the willingness of both sides to transact.
Bank of England figures published on 1 September 2026 show net mortgage approvals for house purchase at 56,100 in July, against an average nearer 60,800 over the previous six months. Net mortgage borrowing fell to £4.3 billion in July from £7.7 billion in June.
In data published on 28 August 2026, HMRC counted 96,710 residential transactions in July on a seasonally adjusted basis, down 1.7% on the month. On the same seasonally adjusted series, the three months to July were 4.0% below the three months before.
The survey data shows where demand has got to since. In its August survey, published on 10 September 2026, the Royal Institution of Chartered Surveyors reported new buyer enquiries at a net balance of minus 19%, the least negative reading since January, and newly agreed sales at minus 17%, the least negative since February.
Both balances are still below zero, so more surveyors reported falling demand than rising demand, but the gap has narrowed from July, when enquiries stood at minus 28% and agreed sales at minus 30%. New instructions to sell were at zero in August, after minus 2% in July, so the flow of new listings has steadied.
Steady supply against demand that is recovering but still negative leaves negotiating power with buyers for now, and it shows up in a survey before it shows up in a price index.
Andrew Asaam, Mortgages Director at Lloyds, described a market in which sellers are “reluctant to accept offers they feel are too low”. That reluctance is exactly why transaction volumes have fallen further than prices have.
Prices hold up when nobody sells. They move when somebody has to.
What this means for property investors
For a buyer, the negotiating room is real but it is specific to a region and, within that, to a price bracket. In Greater London and the South East, asking prices are being set against a market that has fallen for a year while sellers wait, and the gap between an asking price and a financeable offer is now wide enough to be worth testing.
In the North East, the North West, Scotland and Northern Ireland, values are still rising and vendors know it, so discounts there are earned on condition, tenancy quality and speed rather than on market weakness.
Yorkshire and the Humber and the East Midlands sit awkwardly in between, both softening slightly: Yorkshire from the second lowest average price of the eleven, the East Midlands from the middle of the table.
In all of them, the investment case is yield against price, which is what it always was.
For a landlord weighing a sale, two things follow. The national headline is not your number, so price against recent sales in your own area rather than against it.
A home in the North East rising 2.7% and a home in the South East falling 1.6% are in different markets that happen to share a country, and if you own in Yorkshire or the East Midlands you cannot assume northern growth is carrying you, because on this index it is not.
Second, approvals are well below their recent average and net mortgage borrowing almost halved in a month, so the pool of mortgage dependent buyers has thinned.
With fewer mortgage-dependent buyers active, cash and portfolio buyers are likely to make up more of the market for tenanted stock, portfolios and anything needing work, and they price on income rather than on comparables. That changes who your buyer is, and it changes what evidence they want to see.
We covered how that pricing works in what your rental is worth to an investor.
If you own a rental or a portfolio and want to know what it is worth in this market, rather than what a national index implies, get a free desktop valuation: send us the address and the rent schedule and you will have an evidence-backed range within 24 hours, yours whether you sell or not.