Britain’s housing market has effectively stood still for a month — and on Thursday the Bank of England is expected to make borrowing more expensive for the first time in three years.
Key Points
- Nationwide reports annual UK house price growth of just 0.5% in October, the weakest since January 2024, with prices unchanged on the month.
- The Bank of England is expected to raise Bank Rate from 3.75% to 4% on Thursday 5 November — its first increase since 2023.
- Residential property transactions dipped again in September, underlining how mortgage costs are biting.
A market running out of momentum
The latest Nationwide figures paint a picture of a housing market that is not crashing, but quietly stalling. Annual price growth of 0.5% in October was the weakest reading since January 2024, and prices were flat compared with September. Transaction numbers tell the same story: residential deals dipped again in September, as buyers and sellers alike wait to see where borrowing costs settle.
This is what a high-rate housing market looks like in practice. Sellers test optimistic asking prices, buyers — whose mortgage offers are priced off a Bank Rate that has stayed elevated far longer than most expected — cannot stretch to meet them, and chains slow to a crawl.
Thursday’s decision
The bigger event comes on Thursday, when the Bank of England announces its latest rate decision. Economists broadly expect a quarter-point rise, taking Bank Rate from 3.75% to 4% — which would be the Bank’s first increase since 2023. The debate among analysts is less about this week’s move than about what comes after: whether borrowing costs now stay higher for longer, keeping mortgage pricing under pressure well into 2027.
There is some relief elsewhere in the system. Gilt markets have steadied since the Budget, with the ten-year yield reported as low as 5.25% and Citigroup upgrading UK government bonds to overweight, while the IMF has praised efforts to bring the deficit down towards 3.4% of GDP in 2027–28. Calmer bond markets eventually feed into cheaper fixed-rate mortgage deals — but “eventually” is doing heavy lifting for anyone trying to move house this winter.
What it means for households
For borrowers coming off fixed deals, Thursday’s expected rise points to remortgage payments resetting higher once again. For first-time buyers, flat prices are a double-edged sword: the deposit target stops running away, but the monthly cost of the loan that gets them there does not fall.
Retailers are already warning that the squeeze reaches beyond housing: business rates and wage costs are feeding into food prices and hiring budgets heading into Christmas. The housing stall, in other words, is one part of a broader cost-of-living plateau — and its resolution depends on the Bank deciding that Thursday’s rise can be the last.
What happens next
Thursday’s announcement at the Bank will be read alongside its guidance on future moves. A rise paired with language suggesting a peak would likely steady mortgage markets and could thaw transactions in the spring. A rise paired with warnings of more to come would do the opposite — and would make Nationwide’s flat October look less like a pause and more like the start of a slide.
Sources: CPA UK Business News roundup, 2 November 2026 — https://cpa.co.uk/uk-business-news-today-2-november-2026-economy-markets-insolvencies/ ; MoneyAge news in brief — https://www.moneyage.co.uk/news-in-brief-2-november-2026.php