Flats have seen lower price growth than other property types
Annual house price growth in the UK halved to 0.8% in September.
The drop, from 1.6% in August, was the weakest rate of growth since December 2025. September also saw a 0.2% month-on-month decline in prices, after seasonal effects.
Robert Gardner, Nationwide’s chief economist, said it reflected an “uncertain economic backdrop”
“Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices, fanning inflation concerns,” he said.
“This in turn has led to mounting financial market expectations of Bank Rate increases, which has maintained upward pressure on the market interest rates which underpin mortgage pricing.”
More positively, he noted that there were “encouraging signs that higher energy prices are not feeding through to underlying price pressures” and that wage growth had remained “modest”.
Gardner said this “should give policymakers breathing space to assess the extent to which tighter policy is necessary to ensure inflation returns sustainably to target”.
He also noted improving underlying affordability, with earning gains in comparison with house price growth “only partially offset by higher mortgage rates”.
“This suggests that activity should regain momentum in the quarters ahead providing the energy shock fades and confidence returns - especially if market interest rates fall back to pre-conflict levels,” he said.
Over the long-term, Nationwide’s figures show that flats have seen weaker growth than other property types.
Since the start of 2020, the price of a typical flat has risen by 14%, less than half the rise in the price of semi-detached (31%).
“This is partly a reflection of regional trends where London, which has a much greater proportion of flats, has underperformed the wider UK,” said Gardner.
Speaking at the Labour Party conference earlier this week, housing minister Matthew Pennycook said that London’s housing market would remain depressed until the government finished reforms to leasehold, due to the dominance of flatted development in the capital.
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