ISSUE NO. 44 · FRIDAY 2 OCTOBER 2026

House prices down 0.2% in September, bank lending heading for a three-year low, and a £16bn London AI firm that raised nothing

The average UK home is worth £274,251, and that number has started going backwards. September took 0.2% off it and halved the annual rate of increase.

One condition runs under all three stories: borrowing is dear and nobody is in a hurry. Approvals for house purchase are at their thinnest since late 2023, and EY has the banks’ loan books growing more slowly every year to 2027. The money that is still moving went somewhere else this week — into a private share sale that put a $22bn price on a London AI firm.

Below: a housing market running at two speeds, a lending slowdown, Britain’s best AI story, four numbers, the diary and one calculator.

Lead

Only London gained value in the whole of the South, and only by 0.4%.

Nationwide’s index put the average home at £274,251 in September, a 0.2% fall that wiped out August’s gain and slowed annual growth to 0.8% from 1.6%. The regional split is the real story: Northern Ireland up 5.9% over the year, southern England down 0.1%, London up 0.4%. Sales are cooling with it — HMRC has August completions 1% below July and 2% below a year earlier. Robert Gardner, Nationwide’s chief economist, blames dear mortgages and nerves before the Budget, and expects activity to pick up only if the energy shock eases and market rates come down. Healey sets out the Your First Home equity loan on 28 October. Read the full story →

The Numbers

Four numbers: the Bank and the CPI print unchanged, the index down on Wednesday, and the house price figure from yesterday’s index. Thursday’s close had not settled when this was written.

More News

Mortgage approvals have not been this thin since December 2023.

EY expects lending growth to slow from 3.6% last year to 2.9% this year and 2.2% in 2027, the weakest in three years. Business lending takes the heavier hit, dropping from 5.3% to 2.1% this year before recovering to 3.9% by 2028. Net approvals for house purchase fell to 54,900 in August, below the 56,100 the market expected and well short of the 60,100 averaged over the previous six months. Dan Cooper, EY’s UK and Ireland head of banking, calls the caution broad-based, with households and firms both holding back. This is fading, not collapsing; the next approvals figure shows which. Read the full story →

A London company was priced at $22bn this week without taking a penny of new money.

A $300m tender offer let staff and early investors sell stock to buyers led by Wellington and T. Rowe Price, setting a $22bn (£16bn) price while the company itself banked nothing. Goldman Sachs, EQT, Singapore’s GIC and Ontario Teachers’ Pension Plan came in for the first time. February’s round valued it at $11bn; its first, four years ago, at $9m. Enterprise clients now bring 55% of revenue, and paying customers rather than hype are what make this Britain’s best AI story so far. The catch is ownership: by July only two British unicorns had listed at home this year, against 35 in the US. Read the full story →

On the Diary

• Today, 9.30am BST — Average household income, UK: financial year ending 2025. The distribution behind the average, and which households actually moved up.
• Thursday 8 October, 9.30am BST — Business insights and impact on the UK economy. Firms’ own read on trading and costs, which is what the lending forecast rests on.
• Thursday 15 October, 7.00am BST — Monthly GDP, August. The last hard growth figure before the Budget.

The Toolbox

One calculator from the site each issue, picked for whatever the week has made urgent. Free, no sign-up, and it shows its workings.

Mortgage affordability calculator

“Approvals are at a near three-year low because lenders are saying no more often. This works out what they will actually lend you, before you put an offer in.”

The Close

Two of today’s stories are the same story told from either end: money has turned cautious in Britain, and caution looks like a mortgage not approved and a home not sold. The third is what the money that is not cautious does instead — it buys into a private company that may never list here at all. The Budget on 28 October speaks to the first. Nothing in it speaks to the third.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB