THE PROPERTY FILTER TAKE
35% of UK homes are now in postcode areas where house prices are falling, up from 12% a year ago, while the UK average rose 0.8% to £273,100.
London values are falling by 1% and the North West region is up 3.2%, so a portfolio spread across regions may now be moving in two directions at once.
Consider checking recent sold prices around each property before you book a remortgage valuation, especially in London and the South East.
House price falls now reach more than a third of UK homes. The latest monthly house price index was reported by Mortgage Strategy on 27 October 2026. It shows 35% of UK homes are in postcode areas where prices are falling, up from 12% a year ago. Yet the average UK price still stands at £273,100, which is 0.8% higher than last year. That national figure masks a market splitting along regional lines.
Where are house price falls concentrated?
From a portfolio perspective, the national average is the least useful number in this release. Average values are falling by 1% in London, where the typical home is now £5,400 lower than a year ago (Mortgage Strategy, 27 October 2026). In the North West region, the average home is worth £6,600 more than a year ago, an increase of 3.2%.
The falls run deep across the south. 85% of homes in London and the South East are in postcode areas with price falls, according to the same report. So are three quarters of homes in the Eastern region and 42% in the South West. The largest falls are concentrated across the North West London postcode area (2.2%) and WC London (5.7%), and along the south coast, including Bournemouth (1.7%), Truro (2.2%) and Torquay (1.7%).
But prices are still climbing elsewhere. Values are rising by more than 3% in some areas, particularly across the North West and Scotland (Mortgage Strategy, 27 October 2026). In the Liverpool, Carlisle and Kilmarnock postcode areas, prices are rising by more than 4%.
Why are prices falling in southern England?
The report ties the split to affordability. Prices are rising across the rest of the country, where homes are more affordable and the impact of higher mortgage rates is less pronounced, according to Mortgage Strategy. The index commentary adds that the extra cost of mortgages has made buyers more selective. A greater choice of homes for sale has also increased the scope to negotiate on price.
Propertymark chief executive Nathan Emerson reads the figures the same way. "The housing market is becoming increasingly localised, with higher mortgage costs putting pressure on affordability, particularly in southern England," he said (Mortgage Strategy, 27 October 2026). He added that demand remains, "but buyers are increasingly selective and focused on value."
Bank Rate has risen since. The Bank of England's Monetary Policy Committee (MPC, the panel that sets Bank Rate) held a meeting ending on 4 November 2026. It voted 8-1 to raise Bank Rate by 0.25 percentage points to 4%, according to its November 2026 Monetary Policy Summary. The minutes note that benchmark two-year mortgage rates had risen by nearly 50 basis points (0.5 percentage points) since the beginning of September. We covered the decision in our report on Bank Rate rising to 4%.
What does a localised market mean for your portfolio?
If you hold property across several regions, one national figure can mislead your planning. A refinance (replacing a mortgage, often to release equity) rests on the lender's valuation of each property. In a postcode area where prices are falling, that valuation may come in below last year's figure. You may wish to check recent sold prices around each property before booking a remortgage valuation.
The leverage play cuts both ways. A lower valuation raises your loan-to-value (LTV, the loan as a share of the property's value), which can change the products and rates available to you. Consider testing each planned refinance against current rates with our free buy-to-let stress test calculator.
Over the cycle, the regional gap also shapes where new capital goes. This index shows rising values in the North West and Scotland against falls across much of southern England. We looked at the longer-term outlook in our analysis of the Savills house price forecast. If you are weighing regional allocation, our guides to property investment strategies compare the main approaches.
Key takeaways
35% of UK homes are in postcode areas where house prices are falling, up from 12% a year ago, according to the index reported by Mortgage Strategy on 27 October 2026.
The average UK house price stands at £273,100, 0.8% higher than a year earlier.
London values are falling by 1%, leaving the average home £5,400 lower, while the North West region is up 3.2%, or £6,600.
85% of homes in London and the South East are in postcode areas with price falls, against rises of more than 4% in the Liverpool, Carlisle and Kilmarnock postcode areas.
The Bank of England raised Bank Rate by 0.25 percentage points to 4% at its meeting ending on 4 November 2026.
Frequently asked questions
Are UK house prices falling?
Where are house prices falling the most?
Where are house prices still rising?
Why are prices falling in southern England?
