The UK housing market moved, very slightly, in the right direction in August. Nationwide says the average home price rose 0.2% on the month to £275,465, the first increase since April and a touch ahead of the 0.1% economists had pencilled in. Reuters and the Guardian both carried the index on Tuesday.
The number itself deserves some humility. A 0.2% monthly rise follows three consecutive monthly falls, and the average property is still worth more than £3,000 less than Nationwide’s April estimate of £278,880. On the year, prices rose 1.6%, faster than July’s 1.4% but below the 2% forecast. This is a market tracing a flat line, not turning a corner.
What explains the freeze is timing. The Bank of England’s monetary policy committee meets on 17 September to decide the base rate, currently 3.75%, and nobody wants to buy or sell into that uncertainty. Ian Futcher, a financial planner at Quilter, told the Guardian the stop-start nature of the Middle East conflict has driven rate expectations in recent months, leaving the housing market “in something of a holding pattern”, and that while a hold looks most likely, it is becoming increasingly difficult to call.
The underlying picture is mixed rather than bleak. Robert Gardner, Nationwide’s chief economist, pointed out that affordability is quietly improving because house price growth remains well below earnings growth, even though higher mortgage rates have offset some of those gains. His caveat was the energy price cap, which will push household bills to a three-year high this winter. His read, in his own words, is that activity should regain momentum in the coming quarters provided the energy shock wanes and confidence returns.
Momentum is not obvious in the flow data. The Bank of England reported on Tuesday that mortgage approvals for home purchases fell to 56,053 in July, the lowest monthly figure since January 2024, against a six-month average of about 60,800. Approvals lead completions by a couple of months, so the autumn transaction numbers will likely look softer before they look better.
The honest summary: one small rise, on a weak base, ahead of a rate decision that could reset everything. A reader taking comfort from a single Nationwide print should also take the mortgage approval data with it. The two facts point in different directions, and the September vote will decide which one wins.