UK house prices dipped slightly in August, with the Nationwide index showing a 0.1% monthly fall and annual growth easing to 2.1%. The average property now costs £271,079. For landlords, the data underlines a cautious market where affordability remains stretched, but also signals potential buying opportunities if demand continues to outpace supply.
Affordability remains a barrier to buyers
Nationwide’s chief economist, Robert Gardner, noted that “the relatively subdued pace of house price growth is perhaps understandable, given that affordability remains stretched relative to long-term norms.” He pointed out that an average earner purchasing a first-time buyer home with a 20% deposit now spends around 35% of their take-home pay on mortgage repayments, compared with the long-run average of 30%.
Mortgage costs, still more than triple their post-pandemic lows, are slowing first-time buyer activity — leaving more renters reliant on the private rental sector. Gardner suggested that affordability “should continue to improve gradually if income growth continues to outpace house price growth” and if borrowing costs fall further in the coming quarters.
Letting agents report steady sales but stronger bargaining
Propertymark CEO Nathan Emerson said the market has shown resilience despite “turbulence, very much influenced by the current economic backdrop.” He highlighted fewer fall-throughs and a record number of listings, suggesting that while buyers are active, stock levels are keeping price growth in check.
North London estate agent Jeremy Leaf echoed that sentiment: “We are not particularly surprised that prices have softened although agreed sales have held up well, supported by slowly improving affordability and recent reductions in base rate.” However, he cautioned that buyers are “seizing the opportunity of negotiating hard whereas worried sellers often have no option but to agree revised terms.”
For landlords, this points to a market where selective purchases may deliver value, especially in regions where sellers are under pressure to accept lower offers.
Landlords eye opportunities in a cautious market
Jonathan Hopper of Garrington Property Finders described the mood bluntly: “The fleeting summer surge in prices is fading faster than most people’s tans.” He noted that a flood of stock has tipped power towards buyers, forcing sellers to price keenly. That dynamic could give buy-to-let investors the chance to expand portfolios at competitive levels before demand strengthens again.
London agent Marc von Grundherr of Benham and Reeves was more upbeat: “August’s marginal dip is no surprise… this is nothing more than a seasonal summer slump. Now that September has arrived… we should see momentum return quickly.”
Meanwhile, letting agents report that tenants remain active. Sarah Bennett, a Midlands-based agent, told us: “Rental demand hasn’t slowed, even with buyers negotiating hard on sales. For landlords, the rental pipeline remains strong, and if house prices stay flat into autumn, it may be the right time to pick up another property.”
Editor’s view
House prices edging sideways may sound dull, but for landlords it could be the moment to act. With affordability still pushing would-be buyers into long-term renting, the fundamentals of demand are intact. The bigger question is whether political decisions in the Autumn Budget — on tax, Section 21, or mortgage relief — will nudge landlords to expand or retreat. One thing is certain: the tenant queue isn’t getting shorter any time soon.
