October saw steep fall in house prices

November 14, 2026 by Brendan O'Neill

House Prices

New figures show that October brought the steepest annual decline in UK house prices in the past three years.

Those figures are taken from the Lloyds House Price Index. They reveal a 0.6% drop in prices during October, while the year-on-year drop is 1.2%.

In September, the average price of a home in the UK was £298,167. By last month, it had fallen to £296,285. This is the biggest drop when looked at on an annual basis since October 2023.

The reasons for it are varied. A lot of potential buyers are feeling the financial pinch, which leaves them more inclined to wait. Furthermore, mortgage rates are high right now, which also incentivises people to stay put. The result is less buyer demand, forcing sellers to lower their asking prices.

It is not a situation that is likely to change in the near future, either. The Bank of England has just raised the base rate to 4%, which will have a knock-on effect on mortgage rates.

Andrew Asaam works for Lloyds as mortgages director. He was quoted by Mortgage Soup as saying that the inflation caused by the Iran war was another contributing factor. He then added:

“Looking ahead, conditions are likely to remain subdued in the near term, but we don’t expect this to lead to a sustained period of falling house prices.”

A lot of mortgage advisors who have done CeMAP courses will likely be switching their attentions to existing mortgage holders who are worried about their monthly payments going up.