Mortgage rates hit 6% as house prices stall: what October 2026 means for movers
The average five-year fixed mortgage rate reached 6% on 5 October, the first time in about three years. On the same day, Moneyfactscompare put the average two-year fix at 5.98%. Fixed deals priced under 5% fell from nearly 1,500 at the start of September to just nine.
House prices are holding steady but have stopped rising. Nationwide’s annual growth halved to 0.8% in September, and Lloyds recorded no annual change at all. The Bank of England held Bank Rate at 3.75%, but three of its nine policymakers voted for a rise.
House prices flatten out
Nationwide said annual growth fell to 0.8% in September, from 1.6% in August. That is the weakest rate since December 2025. Prices slipped 0.2% on the month. The Lloyds index, formerly the Halifax index, showed prices unchanged on both the month and the year.
| Index | Average price | Monthly change | Annual change |
|---|---|---|---|
| Nationwide (September) | £274,251 | -0.2% | +0.8% |
| Lloyds (September) | £298,441 | 0.0% | 0.0% |
| Rightmove asking prices (September) | £367,440 | +0.7% | -0.8% |
The regional split is clear. Northern Ireland led both lenders’ indices, up 7.4% a year on Lloyds’ figures to a record £231,917. In England, the North is outperforming. Lloyds shows the North East up 2.4% and the North West up 1.9%. Nationwide put the North West up 3.9% in the third quarter.
The South is softer. Lloyds shows London down 2.2% and the South East down 2.1% over the year. Nationwide’s weakest region was East Anglia, down 0.7%.
There are signs of resilience. Nationwide’s Robert Gardner said “underlying affordability is improving, as house price growth has been well below earnings growth for some time.” Lloyds said new buyer enquiries are at their highest since February. Rightmove also reported an above-average 0.7% rise in asking prices in September.
Mortgage rates climb while the Bank of England holds
The Bank of England kept Bank Rate at 3.75% on 17 September. The vote was 6–3. Megan Greene, Catherine Mann and Huw Pill wanted a rise to 4%.
The concern is inflation. Higher oil and gas prices, linked to conflict in the Middle East, pushed CPI to 3.1% in August. The Bank expects it to reach around 3.75% by the end of 2026 and just over 4% early in 2027. It said it “stands ready to act as necessary.”
Lenders have not waited. Moneyfactscompare reported the average two-year fix at 5.98% on 5 October, its highest since December 2023. The average five-year fix hit 6%. Moneyfactscompare’s Rachel Springall called it “disastrous news for borrowers” coming off cheaper deals.
Two dates matter for movers. The next Bank Rate decision is on 5 November. Before that, the Budget is on 28 October. No housing measures have been confirmed yet.
Rents pick up and the landlord register gets dates
Rent growth is accelerating again. Zoopla puts the average new let at £1,343 a month, up 2.6% on a year ago. That compares with 1.6% in February. Homes available to rent are 3% down on last year and 25% below pre-pandemic levels. Each listing now draws 5.3 enquiries on average, the most in almost two years.
Zoopla links this to higher mortgage rates keeping would-be buyers renting for longer. New landlord investment also remains low.
For landlords in England, the Renters’ Rights Act has been in force since 1 May. The government has now set out the landlord database timetable. The “Register your rental property” service opens on 15 December 2026, starting with the West Midlands. Landlords there must register by 14 March 2027.
Other regions follow one month apart. The South West comes last, with a deadline of 14 November 2027. The fee is £65 per property per year. A new private rented sector ombudsman is still expected by 2028.
What it means for you
Buying? Prices are flat, so you have room to negotiate. Rates are the bigger cost now. Get a mortgage agreement in principle early, and ask your broker whether you can lock in a rate before it moves again.
Selling? Buyers are still looking, but they are more price-sensitive. Price realistically from day one. Homes in the South and East need sharper pricing than those in the North.
Renting? Competition for homes is rising and rents are growing faster. Have your references and deposit ready, and move quickly when the right place appears.
Letting? Demand is strong. If your property is in the West Midlands, prepare to register from 15 December. Check your region’s deadline and budget £65 per property.
Be first to the right home
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Sources
- Nationwide: Annual house price growth halves in September, 1 October 2026
- Lloyds House Price Index, September 2026, 7 October 2026
- Lloyds Bank: House Price Index media centre, 7 October 2026
- Hargreaves Lansdown (PA): Annual rate of UK house price growth halved in September, 1 October 2026
- Rightmove House Price Index, 21 September 2026
- Bank of England: Monetary Policy Summary, September 2026, 17 September 2026
- Bank of England: Official Bank Rate history, accessed 13 October 2026
- Moneyfactscompare: Average five-year fixed mortgage rate hits 6%, 5 October 2026
- HM Treasury: Chancellor letter to the Treasury Select Committee, Budget 2026 date, 31 July 2026
- Zoopla: Rental Market Report, September 2026, 14 September 2026
- Mishcon de Reya: Register your rental property service to launch in December 2026, 18 September 2026
- Property Industry Eye: Regional deadlines unveiled for new national landlord register, 10 September 2026
- NRLA: New landlord database risks missing the point, 10 September 2026