The numbers at a glance.
Market-moving news.
Rightmove: biggest August asking price drop in 8 years — confidence hit as rates cross 5%
Rightmove’s August 2026 House Price Index delivered the clearest signal yet that the market is adjusting to a higher-rate world. Average newly listed asking prices fell 2% in August to £364,999 — a fall of £7,360 in a single month. This was the largest August asking price drop since 2018, with prices now running 1% below where they were a year ago — the sharpest annual fall since 2023.
Rightmove’s Matt Smith said: “Confidence has taken a bit of a hit as fixed rates remain elevated and return above the psychologically important 5% mark.” Rightmove’s own daily tracker shows the average 2-year fixed rate at 5.09%, up from 4.95% last month. Rightmove also downgraded its full-year 2026 house price forecast to 0% to −2%, from +2% predicted at the start of the year. Zoopla followed, cutting its own forecast to a 1% rise. Both cited rising mortgage costs as the driver.
Stock levels remain a key factor — supply of available homes in July 2026 was close to a 12-year seasonal high, giving buyers more room to negotiate than at any point since 2014. A third of existing homes on the market have seen asking prices cut by an average of 7%.
For buyers
This is a genuine buyer’s market — high stock, price cuts, and lender competition. Getting a Mortgage in Principle now puts you in the strongest position to move when you find the right property.
For sellers
Competitively priced homes are still selling — average time to find a buyer is 62 days, faster than the 68-day 12-month average. Price realistically from the outset rather than chasing the market down.
Bank of England holds at 3.75% — but September is now a live decision
The MPC voted 6–3 to hold Bank Rate at 3.75% on 30 July, accompanied by the Bank’s quarterly Monetary Policy Report. The vote split is the most hawkish since 2023: chief economist Huw Pill, external member Megan Greene and Catherine Mann all voted to raise immediately to 4%, arguing that self-reinforcing wage and price dynamics risk keeping inflation elevated longer than the Bank’s central forecast assumes.
The majority held, pointing to the surprise drop in CPI to 2.6% in June — below the Bank’s own forecast — and noting that tight borrowing conditions are already doing work to cool demand. The Bank has held at 3.75% at every meeting in 2026, having cut from 4% in December 2025. Fixed mortgage rates are priced off swap markets — where Bank Rate is expected to go — not where it is today. With three members already voting for 4%, markets are pricing a hawkish lean into September. Anyone with a deal expiring in the next six months should seriously consider locking in now.
The Bank’s July MPR showed its central projection for CPI peaking at around 3.2% in Q4 2026 before easing, with risks skewed to the upside given ongoing Middle East uncertainty.
CPI rises to 2.9% in July — energy cap the culprit, core pressures easing
The ONS released July 2026 inflation data on 19 August. Headline CPI rose to 2.9% — up from 2.6% in June and the first increase since March. Driven almost entirely by Ofgem’s 13% energy price cap rise in July, which pushed gas prices up 14.7% in a single month.
Annual CPI rate vs the BOE’s 2% target. Source: ONS, released 19 August 2026. Red = the March conflict spike; the darker gold bars mark readings of 2.8% and above.
Core CPI held steady at 2.6% and services inflation eased slightly from 3.6% to 3.4% — underlying domestic price pressure is not accelerating. The damage is purely external: energy. With another Ofgem price cap rise due in October, headline CPI is likely to push higher again in Q3, keeping the MPC’s hands tied through the autumn.
What this means for mortgage rates
The BOE’s own forecast puts CPI peaking at ~3.2% in Q4 2026. Rate cuts are not expected before spring 2027. The risk of a hike in September is real. Fixed rates are unlikely to fall meaningfully until inflation is decisively moving back toward 2%.
Mortgage rates: cuts and hikes — where do we stand now?
August saw selective cuts resume after July’s two-act story — lenders cutting early in the month before renewed Iran fighting pushed swap rates back above 4%, triggering a wave of hikes from NatWest, Nationwide, Virgin Money, Barclays and Coventry Building Society (some by up to 35bps). The average 2-year fix now sits at 5.09% and the 5-year fix around 5.50%.
| Lender | What changed | Move |
|---|---|---|
| HSBC UK | Cut up to 20bps across residential purchase and remortgage. 2-yr 85% LTV no-fee product now at 5.17%. Max loan limits at 75% LTV raised from £3m to £5m (broker only). | ▼ Cut |
| Nationwide | Reduced up to 15bps across 2, 3 and 5-year fixed products. Lowest rate now 4.48% at 60% LTV with £1,499 fee. | ▼ Cut |
| Hanley Economic BS | Launched first holiday let mortgage range — two variable discount products at up to 80% LTV. 2-year variable at 5.54%, lifetime variable at 5.40%. Open to expats and first-time landlords. | ★ New |
| NatWest / Nationwide / Virgin / Barclays / Coventry | All raised rates in mid-July following renewed Iran conflict. Some products rose by up to 35bps. Nationwide’s 2-yr fix for home movers moved from 4.24% to 4.59% — roughly £40/month extra on a typical mortgage. | ▲ Raised |
The direction of risk remains upward
With the MPC’s growing hawkish split and another energy price cap rise due in October, the average SVR remains around 6.49–7%. If you’re on one, the case for acting is stronger than at any point this year.
House price indices: sold prices holding, momentum fading
While Rightmove’s asking price data made the headlines, the sold-price indices tell a more measured story. Prices have not collapsed — but annual growth is slowing sharply.
| Index | Latest average | Monthly | Annual |
|---|---|---|---|
| Lloyds HPI (fmrly Halifax) | £299,253 (Jul) | 0.0% | +0.1% — slowest since Nov 2023 |
| Nationwide | Broadly flat (Jul) | +0.1% | +1.8% |
| Land Registry | £272,188 (Jun) | +0.1% | +2.0% |
| Rightmove (asking) | £364,999 (Aug) | −2.0% | −1.0% |
| Zoopla | £272,800 | — | +1.3% |
Lloyds (now publishing under its own name after retiring the Halifax brand from July 2026) reported annual growth of just 0.1% — the slowest since November 2023. Net mortgage borrowing rebounded to £7.7bn in June (from £3.3bn in May) and mortgage approvals for house purchases rose from 56,600 to 58,200 — suggesting underlying demand hasn’t collapsed, even as sentiment softens.
£4.5bn housebuilder class action — CAT certification update
The £4.5bn class action filed at the Competition Appeal Tribunal in July — naming Barratt Redrow, Persimmon, Taylor Wimpey, Berkeley Group, Bellway, Bloor Homes and Vistry — has moved into its certification phase. The claim alleges 700,000 new-build buyers between October 2015 and June 2026 paid inflated prices due to anti-competitive information sharing. If certified and ultimately successful, affected buyers could receive between £3,100 and £6,200 each.
City analysts remain broadly sceptical — RBC Capital’s Anthony Codling noted housebuilders are “price takers not price setters” — but the filing adds legal uncertainty on top of a sector already nursing 25–28% year-to-date share price falls. Anyone who bought a new-build from any of the named developers in the relevant period should consider registering with claim administrators Geradin Partners and Hausfeld.
⚠ CAT update: all five major listed builders remain named defendants. Certification hearing expected autumn 2026. Shares fell 1.9–2.3% on the initial announcement and remain well below 12-month highs.
Dates to watch in September
September is the most consequential month of the year for UK mortgage rates. Two days of major data releases immediately precede an MPC decision that could be the most pivotal since December 2025.
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~9 September · Tuesday
UK Labour Market Data
Wages and unemployment for Jun/Jul. Strong wage growth = more inflation pressure on the MPC heading into the rate decision.
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16 September · Wednesday ★
ONS CPI — August 2026
Released the day before the MPC. First full month including July’s energy cap rise. A print above 3% will trigger an immediate market reaction.
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17 September · Thursday ★★
BOE MPC Rate Decision
With 3 members already voting to hike, one more switch could tip a rate rise to 4%. Fixed rates will move on the decision and vote split revealed in minutes.
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~26 September · Friday
Ofgem Q4 Price Cap Announcement
Ofgem confirms the October energy price cap. Another rise is expected, shaping Q4 inflation expectations and the November MPC meeting.
Why 16–17 September is the most important 48 hours in UK mortgages right now
August CPI at 7am on 16 September. MPC decision at 12pm on 17 September. With three members already voting to hike, a hot CPI print could tip the balance. Either way, these two days will directly move the mortgage market. We’ll cover the outcome in full in next month’s newsletter.
Top 5 UK housebuilders — share price & news.
All five are named defendants in the £4.5bn CAT class action filed July 2026. Charts show indicative monthly closing prices Aug 2025–Aug 2026 — confirm live prices via LSE. YTD falls reflect higher rates, build cost pressures, falling demand and legal uncertainty.
Barratt Redrow plc LSE: BTRW
FY 2026 results published July: total completions up 5% to 17,667, ahead of its 17,200–17,800 guidance. Average selling price up 2.3% to £352,000, though underlying pricing fell ~1%. Year-end net cash climbed to £772m — around £170m ahead of April guidance. All £100m of Redrow integration synergies confirmed. CEO announced a £400m capital return programme for FY2027. Shares rose 2.7% on results day but remain near their 52-week low. Barratt achieved 122 NHBC Pride in the Job awards — more than any other housebuilder for the 22nd consecutive year.
⚠ CAT lawsuit: named FTSE 100 defendant in £4.5bn class action. Shares fell 1.9% on the 30 June announcement. Now in certification phase.
Persimmon plc LSE: PSN
JP Morgan’s top pick in the sector — named preferred stock citing lower average selling prices (~£306,900), broad regional spread and vertical integration. Order book has risen 5% to £2.5bn with private average selling prices up 5%. Persimmon’s lower price point makes it structurally less exposed to the affordability squeeze, and of all five builders it is viewed as having the most resilient sales rates in the current environment.
⚠ CAT lawsuit: named defendant in £4.5bn class action filed July 2026. Shares fell 2.3% on the 30 June announcement.
Taylor Wimpey plc LSE: TW.
Downgraded to “underweight” by JP Morgan in June, with 2027 estimates 15% below Street consensus. The bank questions whether TW.’s dividend is sustainable given declining earnings. Order book pricing is “c.1% lower year on year” with the South of England the weakest region as affordability is most stretched. Build cost inflation running at low-to-mid single digits further compresses already tight margins. The most-downgraded stock in the sector across Berenberg, Goldman Sachs and Morningstar during the summer.
⚠ CAT lawsuit: named defendant in £4.5bn class action filed July 2026.
Bellway plc LSE: BWY
Bellway updated the market in August 2026, with focus on whether it can protect its dividend as softer reservations, build-cost pressure and land investment compete for cash. Private reservations have dipped to 151 per week from 161 year-on-year. LSEG analyst consensus rates Bellway as a “buy” — one of the more positive ratings in the sector — citing its track record of operational delivery and strong balance sheet. However, the near-term demand environment is clearly softening.
⚠ CAT lawsuit: named defendant in £4.5bn class action filed July 2026.
Berkeley Group Holdings LSE: BKG
Berkeley’s London and South East focus has become its most acute vulnerability in 2026. Goldman Sachs initiated at “sell”, pointing to constrained medium-term earnings growth given low viability of residential London development, burdened by slower price growth, more regulation and low affordability. Most significantly, Berkeley halted land buying outright — the most explicit signal in the sector that conditions are not yet right for new site investment. Only builder to formally acknowledge the class action publicly.
⚠ CAT lawsuit: named defendant. Berkeley confirmed it is “aware of the claim” and declined further comment. Only builder to publicly acknowledge the action.
Sources: Rightmove House Price Index, Bank of England (MPC Summary, Monetary Policy Report), ONS CPI data, Ofgem, Lloyds House Price Index, Nationwide House Price Index, HM Land Registry, Zoopla, Competition Appeal Tribunal, LSEG, company announcements and broker research as reported in financial media. Swap rates and housebuilder trend lines are indicative — always confirm live rates and prices with your adviser before making any decisions. This newsletter is provided for general information only and does not constitute financial or investment advice. Your home may be repossessed if you do not keep up repayments on your mortgage.