The latest data from Nationwide reveals that UK house prices fell again in August, with the average home now valued at £259,153 – a 5.3% drop year-on-year. That’s the sharpest annual decline since 2009, and it’s largely driven by the ongoing impact of high mortgage rates.
📉 What’s Driving the Decline?
The Bank of England’s efforts to curb inflation have kept interest rates elevated, which in turn has pushed up mortgage costs. This has made it harder for buyers to afford homes, especially in areas where prices surged during the pandemic. As a result, demand has cooled, and sellers are adjusting expectations.
🧠What Should Buyers and Homeowners Know?
🏠For Buyers:
- Opportunity in a cooler market: With less competition and more realistic pricing, buyers may find better deals – especially if they’re flexible on location or property type.
- Negotiation power: Sellers are more open to offers, particularly if their property has been on the market for a while. Don’t be afraid to negotiate.
- Mortgage readiness matters: Having a mortgage agreement in principle can give you an edge and speed up the process.
🏡 For Homeowners:
- Stay calm: If you’re not selling, this dip is mostly academic. Property is a long-term asset, and short-term fluctuations are normal.
- Review your mortgage: If you’re on a variable rate or nearing the end of a fixed term, now’s a good time to explore your options. A remortgage could help manage costs.
- Think strategically: If you’re planning to move, consider how the current market affects both your sale and your next purchase. Downsizing or upsizing might require a fresh affordability check.
đźšš For Movers:
- Equity matters: If your home has gained value over the years, you may still have strong equity even with recent declines.
- Timing is key: Selling and buying in the same market can balance out the impact of price changes. Focus on the bigger picture, not just the sale price.
🎯 Tips for First-Time Buyers
Navigating the market for the first time can feel overwhelming – especially in a shifting landscape. Here are some smart moves to help you get ahead:
- Get your finances in order
Check your credit score, reduce debts, and build up your deposit. The stronger your financial profile, the better your mortgage options. - Use a trusted broker
A mortgage broker (like us!) can help you access deals not available on the high street and tailor advice to your situation. - Understand all costs
Budget for more than just the deposit – include legal fees, surveys, stamp duty (if applicable), and moving costs. - Be realistic but optimistic
You might not get your dream home first time, but buying now could be a stepping stone to something bigger later. - Consider government schemes
Look into options like Shared Ownership or First Homes if you’re struggling with affordability. - Stay informed
The market is changing fast. Follow updates and speak to professionals regularly to make informed decisions.
đź’¬ My Take
This isn’t a crash – it’s a correction. And for many families and first-time buyers, it could be the moment to make a move. Whether you’re buying, selling, or just planning ahead, understanding the market is key.
At My Family Mortgages, we’re here to help you navigate it all with confidence. Let’s talk about your goals and how we can make them happen.
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Published: 1st September 2025
By Oli Pearce, Mortgage & Insurance Director