Autumn housing market update

September’s housing market figures come against a backdrop of rising borrowing costs, inflationary pressures from the Middle East conflict and uncertainty ahead of the Autumn Budget.

Sales market

September saw a modest seasonal recovery in buying activity, but house prices remained broadly unchanged.

Higher mortgage costs restricted what buyers could afford, especially in southern England, where property prices are considerably higher. At the same time, sellers faced increasing competition as the number of homes for sale hit a 12-year high for this time of year.

In the more affordable areas of northern England, however, there was a far stronger market, with higher levels of demand and modest house price growth.

Rightmove measures asking prices; Nationwide and Lloyds use mortgage lending data. Differences in their samples and the properties covered account for variations in average prices.

Rightmove

According to the latest Rightmove House Price Index, asking prices increased for the first time since May, rising by slightly more than the usual September average.

However, they were still 2.3% below where they had been at the start of the summer.

And, although buying activity picked up following the holidays, buyer enquiries and agreed sales were both 9% below September last year.

Rightmove’s property expert Colleen Babcock said: “September’s above-average price rise is a welcome sign of confidence after a particularly subdued summer, but it should be viewed as a modest recovery rather than a major turning point.”

In further evidence of the challenging conditions, properties were taking an average of 64 days to sell, with only 61% finding a buyer.

There were considerable regional differences, though. In the North West, 71% of listed properties found a buyer, compared with just 42% in London.

Nationwide

Nationwide’s House Price Index showed annual growth halving from 1.6% to just 0.8% in September, its weakest level since December 2025.

The longer-term picture, though, is more encouraging. According to Nationwide’s Chief Economist Robert Gardner: “Underlying affordability is improving, as house price growth has been well below earnings growth for some time.”

And he added that these gains had been only partially offset by higher mortgage rates.

Nationwide’s quarterly figures showed annual house price growth was strongest in the North West at 3.9%.

Its quarterly figures also revealed a clear difference between the property types. Terraced houses recorded annual growth of 1.8%, compared to approximately 0.1% for flats.

Lloyds

The Lloyds House Price Index showed prices were flat on both a monthly and annual basis.

However, there was some encouragement in its figures on buyer activity, with enquiries from prospective purchasers reaching their highest level since February.

As Mortgages Director Andrew Asaam explained: “For now, the housing market appears to be balancing buyer caution with continued underlying demand.”

Zoopla: The cost of higher mortgages

Although Zoopla’s house price data runs a month behind the other indices, its September research provided some useful insight into the impact of higher mortgage rates.

It estimated that the average five-year fixed mortgage rate had risen from around 4% at the beginning of the year to 5.2% by the end of September.

For an average buyer, that meant paying approximately £150 more a month, or £1,800 a year, on their mortgage, leaving less room to stretch to sellers’ asking prices.

Rental market

The effects of the Renters’ Rights Act, introduced in England in May, are still feeding through to the market, amid concerns that landlords could sell up and reduce rental supply, putting further upward pressure on rents.

Despite a fall in the number of available rental properties, there was little evidence in September of a substantial increase in landlords selling up.

Rents reached new record highs, but annual growth was slowing as tenant demand eased in much of the country.

There was a slightly different picture in London, where rent rises were running substantially higher. That was because supply was falling just as demand was rising, driven by the high cost of buying a home in the capital and the return to office working.

HomeLet and Goodlord measure rents agreed on new tenancies, but their samples and methodologies differ. Goodlord revised its methodology in September. Rightmove’s figures are quarterly advertised rents, excluding London, so they are not directly comparable.

HomeLet

According to the latest HomeLet Rental Index, annual rental growth slowed from 4.1% in August to 3.3% in September. The increase was largely driven by London, where rents rose by 1.5%, but there were falls in eight out of the twelve regions.

Affordability remains an issue. HomeLet found that tenants were spending an average of 32.1% of their gross income on rent, rising to 37.9% in London.

Jo Dickens, HomeLet’s Head of Business Development, said: “A slower rise in local rents doesn’t necessarily mean applicants are finding properties easier to afford.”

Goodlord

The Goodlord Rental Index recorded stronger national rental growth than HomeLet’s, but found similar regional differences.

The North East was a notable exception to the general slowdown, recording annual rental growth of 14% and some of the shortest periods between tenancies.

The national average void period fell to 20 days in September, but was just 11 days in the North East.

CEO William Reeve said: “Key factors, such as the sharp drop in net migration figures, are likely to be helping ease some of the supply/demand imbalance we’ve seen over recent years.”

Rightmove

Rightmove’s latest quarterly rental report recorded the lowest annual growth at 2.4% (outside London), with 3.2% growth in the capital.

Its data showed available rental properties and tenant demand both fell by 2% nationally. In London, however, available properties fell by 9%, while demand increased by 6%.

In a clear sign that there has, as yet, been no significant exodus of landlords, the proportion of properties for sale that were previously available to rent remained relatively stable at 13%, compared with 12% last year.