- UK annual house price growth halved to 0.8 per cent in September.
- East Anglia recorded the biggest annual fall, while Northern Ireland remained the strongest-performing region.
- The new Your First Home scheme is expected to let eligible buyers put down a 2.5 per cent deposit on qualifying new-build homes in England.
UK house price growth slowed sharply in September, with the average property rising just 0.8 per cent over the year to £274,251, according to Nationwide. Growth had stood at 1.6 per cent in August, making September the weakest annual increase since December 2025.
Prices also fell 0.2 per cent month on month after seasonal adjustment, suggesting buyers remain cautious as higher borrowing costs and wider economic uncertainty weigh on the market.
For people trying to buy their first home, however, the softer market comes alongside a new potential route into home ownership.
The Government has announced Your First Home, an equity loan scheme expected to allow eligible first-time buyers in England to purchase qualifying new-build homes with a deposit of just 2.5 per cent. The Government would provide an equity loan worth 20 per cent of the property's value, leaving the buyer to fund the remaining 77.5 per cent through a mortgage.
The scheme has not opened yet. More details, including household income limits, local property price caps and implementation arrangements, are due to be confirmed at the Budget on October 28.
A softer market, but mortgages remain a hurdle
The latest Nationwide figures show how uneven the housing market has become.
East Anglia was the weakest-performing UK region, with prices down 0.7 per cent over the year. The East Midlands recorded a 0.5 per cent fall, while the South West declined 0.3 per cent. Prices in the Outer Metropolitan region fell 0.2 per cent.
Northern Ireland remained the strongest performer, although annual growth slowed to 5.9 per cent from 8.6 per cent in the previous quarter. Scotland recorded 3.3 per cent growth, while the North West rose 3.9 per cent. London was up just 0.4 per cent.
Nationwide chief economist Robert Gardner said, "Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices, fanning inflation concerns."
Those pressures have fed into expectations for higher interest rates and, in turn, mortgage pricing. Moneyfacts data cited in the source material showed average two-year and five-year fixed mortgage rates above 5.9 per cent.
That creates a mixed picture for potential buyers. Slower house price growth can make the purchase price less difficult to manage, but a more expensive mortgage can offset some of that benefit.
Gardner said underlying affordability was improving because house price growth had remained below earnings growth for some time, although higher mortgage rates had partly reduced those gains. He said activity could regain momentum if the energy shock fades and confidence returns.
The new route onto the housing ladder
Your First Home is aimed particularly at people who can manage mortgage repayments but struggle to build a large enough deposit.
Prime Minister Andy Burnham said the scheme would help people "especially those who can't call on the Bank of Mum and Dad" to buy their first home.
Under the proposed structure, a buyer would need at least a 2.5 per cent deposit, while the Government would provide an equity loan worth 20 per cent of the property's value. An ordinary mortgage would cover the remainder.
The scheme is restricted to England and new-build properties bought from developers that sign up. It will also include income and local property price caps, although those limits have not yet been announced.
The Government says the loan will have an initial interest-free period, which could reduce monthly housing costs compared with a 95 per cent mortgage. The exact length of that period is still to be confirmed.
The scheme is also intended to support housebuilders. The Government said the new-build market is facing pressure from international economic conditions and higher construction costs, and described the scheme as a way to support demand and housing supply. Developers will be expected to contribute towards the cost of participating.
For now, first-time buyers still have to wait for the Budget before they know exactly how the scheme will work. But its announcement comes at a moment when the wider housing market is losing momentum, giving prospective buyers another factor to consider alongside mortgage rates, house prices and the size of their deposit.
