The Lloyds House Price Index showed UK house prices dropped 1.2% year-on-year in October 2026, exceeding market expectations for a 0.3% decline, following a 0.1% fall in September. This marked the steepest annual fall since October 2023. On a monthly basis, prices fell 0.6%, compared with a 0.1% decrease in September, while the average property price dropped to £296,285 from £298,167. Lloyds Mortgages Director Andrew Asaam said renewed inflationary pressures, partly driven by the conflict in the Middle East, were keeping borrowing costs high and weighing on household finances, making buyers more cautious. He added that market conditions are likely to remain subdued in the near term, although a sustained period of falling house prices is not expected. Regionally, Northern Ireland recorded the strongest annual growth at 4.4%, followed by Scotland at 2.8%, the North West at 2.2%, and the North East at 2%. Meanwhile, Greater London posted the largest annual decline at 3.1%.