UK house prices fell 0.4% year-on-year in August 2026, their first annual decline since November 2023, Lloyds data showed. The result defied economists' forecast for a 0.2% gain. Average prices slipped 0.2% on the month, or about £685, to £298,468, approximately $400,000, while July's initially reported 0.1% increase was revised to a 0.1% decline. Lloyds mortgages director Andrew Asaam said higher inflation, borrowing costs and uncertainty linked to the U.S.-Iran war had left the market subdued, with buyers and sellers largely waiting rather than pursuing sharp price cuts. The average two-year fixed residential mortgage rate stood at 5.6% on Friday and the average five-year deal at 5.66%, Moneyfacts said, while mortgage approvals fell to their lowest level since early 2024. Capital Economics expects prices to do little more than flatline over the rest of 2026, despite forecasting a 1.5% annual gain in the fourth quarter. Nationwide reported a contrasting 1.6% annual rise in August, while official data showed annual house-price growth slowing to 2.0% in June.