House price growth remained largely flat in August as an uncertain economic backdrop persisted, according to Nationwide’s latest House Price Index.
Annual house price growth reached 1.6%, up from 1.4% in July, while prices rose 0.2% on a monthly basis following a slight dip in July, after taking seasonal factors into account.
Robert Gardner, Chief Economist of Nationwide, said: “Market activity and house prices have remained subdued in recent months, in part reflecting the uncertain economic backdrop. Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices and market interest rates.”
“Market expectations of the future path of Bank Rate have been volatile. While the latest energy price shock poses inflation risks, there have been encouraging signs that it is not feeding through to underlying price pressures. Indeed, private sector wage growth has eased further in recent months, which should give policymakers breathing space to assess the extent to which tighter policy is necessary to ensure inflation returns sustainably to target.”
“Underlying affordability is improving, as house price growth remains well below earnings growth, although some of these gains have been offset by higher mortgage rates. Nevertheless, this suggests that activity should regain momentum in the quarters ahead providing the energy shock wanes and confidence returns, especially if market interest rates fall back towards pre-conflict levels.”
Jason Tebb, President of OnTheMarket, commented: “Broadly stable property values indicate a subdued market as focused buyers prepared to make their move during the usually quieter summer period proved to be price-sensitive in their negotiations.”
“However, market resilience continues to be evident even while higher mortgage costs and economic uncertainty bring an element of caution. The market has steadied, helped by a calm hand at the tiller from the Bank of England with consecutive interest rate holds allaying fears and helping with affordability.”
“Should mortgage rates remain stable and economic uncertainty eases, this could filter through to renewed activity and sales in the autumn. Inactivity isn’t an option for many, even if a new Prime Minister and another Budget brings an inevitable degree of doubt.”
As part of its August House Price Index, Nationwide also highlighted the premium that houses located in National Parks can command.
Nationwide found that these areas are consistently highly desirable and demand for houses remains high. New housing construction is also limited in National Parks, which Nationwide says is part of the reason house prices in these areas tend to remain relatively high.
Robert Gardner continued: “Our analysis indicates that a home being located within a National Park attracts a 24% premium compared to a similar property elsewhere. This is around £66,500 in cash terms based on UK average house price in Q2 2026 (£278,784).”
“We also see a ‘fringe benefit’ for properties located close to National Parks. Those within 5km of a National Park command a 6% premium compared with those outside this range.”
“We also explored the impact of being within a ‘National Landscape’ area in England & Wales (also known as Areas of Outstanding Natural Beauty (AONBs)), which include places such as the Surrey Hills, Cotswolds and Chilterns.”
“We found that properties in these areas attract a 14% price premium (over an otherwise identical property). These areas include some highly desirable locations, and the premium is likely to reflect the continued attractiveness of rural areas and the associated lifestyle.”
