House prices eased 0.2% in August, pushing the yearly measure below zero, a milestone not seen since November 2023. On a year earlier, values were down 0.4%. The average property price edged to £298,468 from £299,153 in July, and is still roughly a quarter above where it stood at end-2019, even after a sizable climb in interest rates. Lloyds notes wage gains have softened some of the affordability squeeze.
The regional map is a patchwork. Prices fell 1.6% in the South East and 1.5% in Greater London. The South West and Eastern England each saw declines of around 1.2%. Northern Ireland led on the upside with a 6.9% rise, Scotland increased 3.5%, and there was growth across the north too.
Economic uncertainty is making would-be buyers hesitate. Mortgage approvals last week were reported at their lowest since early 2024, and Bank of England data showed mortgage lending fell 3.7% in July, hinting at softer lending ahead.
Not every yardstick is pointing the same way. Nationwide recorded a 0.2% monthly rise in August, a small acceleration from July, which it revised to a 0.1% gain from a slight drop. These indices tend to move together over longer stretches, but month to month they can diverge because they track different mixes of homes. With fewer transactions in a cooler economy, and August already a slower month, gaps are more likely to show up.
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"We expect the market to remain fairly subdued in the months ahead, but this will likely only have a limited impact on house prices. While affordability remains a challenge, wages continue to grow and employment has held up better than many anticipated. This will help to support demand from those who need or want to move," said Andrew Asaam, mortgages director at Lloyds. He added that while rates have risen substantially since late 2019, wage growth has helped counter some of the affordability pressure.
For your budget, the takeaway is simple: pricing is softer in parts of the country but not collapsing, and the tug-of-war between higher borrowing costs and rising pay is still setting the tone.
