Mortgage rates UK 2026 housing affordability: market loses momentum
Buyer enquiries and agreed sales weakened in September, Lloyds put prices flat, and weekly data show sales 7.4% below 2025 so far this year as borrowing costs stay high.
Latest update ·
Added further September and early-October data showing flat prices and weaker annual sales volumes, plus the Bank of England vote, swap rates and market expectations of a November rate rise. All 2 updates
Key points
- RICS said on 8 October that buyer enquiries fell in September for the first time since March (net balance -22%), agreed sales slipped, and surveyors expect prices to fall over three months.
- Lloyds put average prices unchanged in September. Property Industry Eye's weekly data show 944,000 sales agreed so far this year, 7.4% fewer than at this point in 2025.
- The Bank of England held Bank Rate at 3.75% in September, with three of nine members voting for a rise to 4%, according to Mortgage Strategy.
The outlook for mortgage rates UK 2026 housing affordability stayed weak in September, according to figures published on Thursday 8 and Friday 9 October 2026. The RICS UK Residential Market Survey found that buyer enquiries weakened for the first time since March, agreed sales fell, and respondents expect house prices to fall over the next three months. Weekly transaction data reported by Property Industry Eye on 9 October show homes sold subject to contract running 7.4% below the same point in 2025.
Prices themselves look flat rather than collapsing. Lloyds reported that average UK prices were unchanged in September on both monthly and annual measures. RICS said a renewed rise in interest rate expectations had created “a fresh headwind for the housing market”.
Tarrant Parsons, head of market research and analysis at RICS, said the results “do not point to any significant shift in direction”.
The picture fits the Bank of England’s Agents’ summary of business conditions, published in September, which reported “further softening in residential and commercial property markets” and “little expectation of an imminent improvement”. The newer figures put numbers on that softening and show it continuing into the autumn.
What the RICS survey found for September
RICS recorded a net balance of -22% for new buyer enquiries in September, down from -18% in August. That was the first deterioration for six months, although the reading is still well above the -41% recorded in March. Agreed sales slipped to -18%.
| RICS measure (net balance) | August 2026 | September 2026 |
|---|---|---|
| New buyer enquiries | -18% | -22% |
| Agreed sales | n/a | -18% |
| Sales expectations, next three months | -3% | -6% |
| House prices | -28% | -32% |
| Rent expectations, next three months | +44% | +37% |
The house price balance fell to -32% from -28%, ending four consecutive months of improvement. London was notably weaker than the national figure and most other English regions were negative, while prices kept rising in Northern Ireland and Scotland recorded modest growth. The three-month price expectations balance stood at -24%, but the 12-month balance was zero, which RICS reads as a broadly flat year ahead.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, said buyer interest had picked up since the summer but not by as much as agents had hoped. “When confidence is not particularly strong, as now, uncertainty over the direction of travel for mortgage rates, inflation – even the Budget – weighs more heavily on decision-making,” he said. New sales instructions moved to +6%, the first positive reading since mid-2025, while tenant demand rose for a third month running, to +23%.
Other measures: flat prices, fewer sales than last year
No single index tells the whole story, and the latest releases do not all point the same way. Lloyds said prices were unchanged in September after the first annual decline since 2023 in August. According to Reuters, as carried by Prop News Time, economists had expected a 0.1% monthly rise and a 0.2% annual increase, so the reading was weaker than forecast. Lloyds Mortgages Director Andrew Asaam said the market was balancing cautious buyers with underlying demand, and that new mortgage enquiries had reached their highest level since February.
| Price measure | Latest reading | Source |
|---|---|---|
| Lloyds, September | Unchanged monthly and annually; -0.2% over the quarter | Lloyds, via Reuters |
| Lloyds, August | -0.2% monthly; -0.4% annually | Mortgage Strategy |
| Rightmove asking prices | +0.7% monthly; 0.8% below a year earlier | Mortgage Strategy |
| Official UK House Price Index, July | 1.4% higher annually, at £273,000 | Mortgage Strategy |
Volumes tell a more cautious story. Property Industry Eye’s weekly statistics show 944,000 UK homes sold subject to contract so far this year, 7.4% fewer than the 1.019 million at this point in 2025. Net sales, which exclude sales that fall through, stand at 728,000, 6.3% below last year’s 777,000. In week 39, 23,600…
How this article was produced
This story was researched, written and fact-checked by the Reported.News AI newsroom and edited by Alexander Ingram, our AI Money desk editor. Every claim is checked against the sources listed below. Our Editors, Jack Shaw, James Smith, Matthew Price and Suzy Eaton, oversee everything we publish. Read how we report.
Verification status
Sources (12)
- Agents' summary of business conditions - September 2026 (Bank of England, 11 Sep 2026)
- data.gov.uk dataset directory: house price and affordability datasets (data.gov.uk, 26 Apr 2014)
- data.gov.uk dataset directory: mortgage datasets (data.gov.uk, 28 Feb 2014)
- data.gov.uk dataset directory: first-time buyer datasets (data.gov.uk, 26 Apr 2014)
- ‘Pain in the post’ for housing market as buyer demand weakens and mortgage costs jump (Property Industry Eye, 8 Oct 2026)
- UK housing market stalls as buyers retreat (Edinburgh Chamber of Commerce, 8 Oct 2026)
- Higher interest rate expectations weigh on UK housing market as buyer demand softens (Specification Online, 8 Oct 2026)
- Is the UK property market really dead? (Property Industry Eye, 9 Oct 2026)
- Market Watch: Does AI know your name? (Mortgage Strategy, 8 Oct 2026)
- UK house prices remain flat in September as higher mortgage rates weigh on market (Prop News Time, 18 Aug 2026)
- UK housing market loses momentum as rate expectations weigh on buyers (Mortgage Professional, 9 Oct 2026)
- UK Housing Market Loses Momentum as Rate Hike Fears Return — BigGo Finance (BigGo Finance, 8 Oct 2026)
Updates
11:04, 9 Oct 2026 — Added further September and early-October data showing flat prices and weaker annual sales volumes, plus the Bank of England vote, swap rates and market expectations of a November rate rise.
11:09, 8 Oct 2026 — RICS data for September 2026, published on 8 October, showed weaker buyer demand and a net balance of respondents expecting house prices to fall over the next three months, and Moneyfacts put the extra cost of mortgage rates at almost £2,000 a year.
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Desk View · Opinion · Alexander Ingram (AiMoney)
Story meets IPSO/legal standards. All figures sourced to official bodies (RICS, Lloyds, Bank of England, Property Industry Eye). Quotes properly attributed with context. No defamatory allegations. No contempt issues (no active criminal proceedings). No privacy or child identification concerns. Tone is measured and factual; headline does not overstate body. No financial advice given. Story incomplete at end but content checked is compliant.
Opinion from our AI money desk, based on the verified facts above. This isn't financial advice.
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