TL;DR
- The Lloyds House Price Index puts the average UK home at £296,285, down 1.2% on a year earlier and the biggest annual fall since October 2023, with Greater London down 3.1% (Mortgage Solutions, City AM).
- RICS surveyors report the weakest 12-month sales outlook since July 2023, yet expect rents to keep rising, and HomeLet's new-let rents are 2.2% above last year (RICS, The Intermediary, HomeLet).
- After the Bank of England lifted Bank Rate to 4% on 5 November, Barclays, Santander, NatWest and Nottingham Building Society cut selected fixed rates, by up to 40 basis points at Barclays (Mortgage Solutions, Mortgage Strategy).
What do the three datasets show?
Three producers, three methods, and a consistent picture of falling prices and firm rents. The Lloyds index, published on 6 November, shows prices falling 0.6% in October alone. Over twelve months the average home lost 1.2%, to £296,285 (Mortgage Solutions). A month earlier the annual fall was only 0.1% (City AM).
The pain is concentrated in the south. Greater London fell 3.1% to £524,892 (City AM), and the South East and South West each lost 2.4%. Northern Ireland, by contrast, gained 4.4% and Scotland 2.8% (Mortgage Solutions, AJ Bell). Jonathan Hopper of Garrington Property Finders called it "sharp correction territory" for Southern England (Mortgage Solutions).
RICS, the surveyors' body, measures sentiment rather than sales. Its October survey, published on 12 November, uses net balances: the share of surveyors reporting a rise minus the share reporting a fall. The price balance slipped to -36% from -34%, and the agreed-sales balance to -24% from -18%. The 12-month sales outlook, at -17%, is the weakest since July 2023 (RICS, The Intermediary). These are opinions, not a count of completed sales. The headline readings cover England and Wales.
Why are rents holding while prices fall?
Because supply is shrinking while demand edges up. RICS reports a net balance of -30% for new landlord instructions, while tenant demand turned positive at +7% from -1%. Surveyors' three-month rent expectations rose to +41% from +29%, the strongest since early 2024 (RICS). Jeremy Leaf, a north London estate agent and former RICS residential chairman, said landlords who sell are "not being replaced quickly enough", so rents are "firming up" (The Intermediary).
HomeLet's index, which tracks rents agreed on new tenancies, tells a similar story with a softer month. The UK average eased 0.9% to £1,375 in October, a drop of £12, but stayed 2.2% above a year ago (Residential Landlord, HomeLet). London averaged £2,260, 1.9% higher than a year earlier (Residential Landlord).
Rent took 32.7% of the average tenant's income in October, up from 32.1% in September, and 38.9% in London (Residential Landlord, Landlord Today). HomeLet's Carrie Alliston said renters are "spending almost a third of their income on rent". Constrained supply and modestly rising tenant demand, in RICS's words, are what keep rents from falling.
Annual change, latest readings
Prices fell on the year while new-let rents rose, which is the gap this piece is about (Mortgage Solutions, Residential Landlord).
Why are lenders cutting fixed rates after a rate rise?
The Bank of England's Monetary Policy Committee voted 8 to 1 at its meeting ending 4 November, and announced on 5 November, a quarter-point rise in Bank Rate to 4%, with one member preferring a half-point move (Bank of England). Within days, lenders began trimming prices. Barclays cut selected two- and five-year fixes by up to 40 basis points (a basis point is one hundredth of a percentage point). A five-year remortgage at 85% loan-to-value fell from 5.74% to 5.34% (Mortgage Solutions).
Others followed. Santander trimmed a two-year fixed remortgage at 60% loan-to-value from 5.12% to 4.92%, NatWest announced cuts of up to 20 basis points from 12 November, and Nottingham Building Society up to 22 basis points the same day (Mortgage Strategy). NatWest reprices 196 products and brings 16 residential deals below 5% (The Intermediary).
| Lender | Product | Before | After |
|---|---|---|---|
| Barclays | Five-year fixed remortgage, 85% loan-to-value | 5.74% | 5.34% |
| Santander | Two-year fixed remortgage, 60% loan-to-value | 5.12% | 4.92% |
| NatWest | Selected fixed rates, from 12 November | Not stated | Cut of up to 20 basis points |
| Nottingham Building Society | Selected fixed rates, from 12 November | Not stated | Cut of up to 22 basis points |
Barclays and Santander published both rates, while NatWest and Nottingham Building Society gave only the size of the cut (Mortgage Solutions, Mortgage Strategy).
The explanation brokers give is timing. Fixed rates follow swap rates, the wholesale price lenders pay to fund fixed loans, and those had already moved ahead of the decision. Toby Quanstrom of Quanstrom Financial said the cut "tells you the hike was already priced into mortgages" (The Intermediary). Aaron Strutt of Trinity Financial said swap rates have since improved (What Mortgage).
How far do the cuts go?
Not very far yet. Moneyfactscompare put the average two-year fixed rate at 5.95% and the five-year at 5.97% on 10 November (What Mortgage). The Bank of England's 5 November minutes noted that benchmark two-year mortgage rates had already risen by nearly 50 basis points since the start of September (Bank of England). The cuts take a little off a higher base.
What Barclays' five-year cut means for monthly payments
At 5.74%–
At 5.34%–
Monthly saving–
The two rates are Barclays' five-year remortgage rates at 85% loan-to-value, before and after the cut (Mortgage Solutions).
They are also selective. NatWest raised one buy-to-let purchase product from 4.16% to 4.59% on the same day it cut others (Mortgage Strategy), and Barclays lifted one Premier tracker by 13 basis points (Mortgage Solutions). Adviser Tracey Dixon of Pure Mortgage and Protection said the cuts are "no promise that the next move will also be down" (The Intermediary).
RICS expects no quick relief. The Bank of England projects inflation of around 5% by the middle of next year (Bank of England). RICS's research head, Tarrant Parsons, said that with inflation projected to approach 5% next year, mortgage rates are "likely to remain elevated for longer" (The Intermediary).
Why it matters
Our view: the same shortage of landlords that keeps rents up is a sign of a market where owners are under pressure, and cheaper fixed rates have yet to change that. Prices are 1.2% lower on the year while new-let rents are still 2.2% higher (Mortgage Solutions, Residential Landlord). The lender cuts are small against an agreed-sales balance of -24% (RICS).
Two scenarios, neither a forecast. If lenders keep passing cheaper funding on, then sales could stabilise and the slide could ease, as Lloyds' Andrew Asaam suggested when he said he does not expect "a sustained period of falling house prices" (City AM). If inflation approaches 5% next year, as the Bank of England projected on 5 November (Bank of England), and that forces more rate rises, then the cuts could reverse and prices could keep falling (Bank of England).
FAQ
Are UK rents falling?
HomeLet's October index shows new-let rents down 0.9% on September but 2.2% above October 2025 (Residential Landlord).
Does a net balance of -24% mean 24% fewer sales?
No. RICS defines a net balance as the share of surveyors reporting a rise minus the share reporting a fall, so it measures sentiment, not a count of sales (RICS).
Why did lenders cut rates after the Bank raised its own?
Brokers say fixed rates had priced in the rise beforehand and funding costs have since eased (The Intermediary, What Mortgage).
If prices keep slipping and rents keep holding, who in your market takes the strain first: the buyer, the landlord or the tenant?
