UK house prices fell by 0.6% in October, taking the average property price down to £296,285, according to the Lloyds House Price Index. Prices are now 1.2% lower than a year ago, the biggest annual fall since October 2023, the index released on 6 November shows.

The Lloyds index, formerly published under the Halifax name, also recorded a fall of 0.5% over the latest three-month period. A Lloyds spokesperson said housing demand was being tested by a challenging economic backdrop, with renewed inflationary pressures, driven in part by the conflict in the Middle East, keeping borrowing costs high and adding to the squeeze on household finances, making some buyers understandably more cautious.

Seen in the round

The bank stressed that the acceleration in price falls must be seen in the round. It said house prices had changed relatively little over the past couple of years, as the market gradually adjusted to higher interest rates, and that the recent rise in energy and other household costs had added to the pressure on buyers, so some adjustment in prices was not surprising.

Looking ahead, Lloyds warned that conditions were likely to remain subdued in the near term. But the spokesperson said the bank did not expect the fall to lead to a sustained period of falling house prices, adding that with wages continuing to rise faster than property prices, the gap between earnings and house prices should gradually narrow, helping affordability to improve over time.

How the index is built

The Lloyds index, previously published under the Halifax name after a rebrand in July 2026, is calculated from the bank’s database of around 300,000 mortgage approvals, with the figures seasonally adjusted. That makes it a timely snapshot of mortgaged purchases, but it does not cover cash sales. The official UK House Price Index, based on completed sales recorded by HM Land Registry including cash purchases, put the average UK house price at £273,037, up 1.4% in the year to August 2026, the latest data available. The two series measure different things over different periods, so they often disagree in any given month.

The October fall is the sharpest monthly drop in the Lloyds series in recent months, and the first time the annual rate has fallen by more than 1% since October 2023. For buyers, the figures suggest asking prices may come under pressure if sellers need to move quickly, while for sellers they point to a market in which pricing realistically matters more than it did during the post-pandemic surge.

Other measures tell a different story

The Lloyds figures contrast with the Nationwide index, which recorded annual house price growth of 0.5% in October, down from 0.8% in September and the weakest growth since January 2024. Rightmove’s index of asking prices showed a 0.1% annual fall. The indices are built differently: Lloyds and Nationwide are based on their own mortgage approvals data, while Rightmove tracks asking prices, and none of them covers cash purchases. That means the headline figures can point in different directions in the same month, even when they agree that the market is subdued. Sources: Estate Agent Today and WR News.