Are house prices at all-time highs?
Is buying actually better than renting?
And who really gained from the housing market?
Let's slice through economic jargon and follow the crumbs to understand the real story of the UK housing market.
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UK House Prices
Average house price in the UK over time, shown in both GBP and loaves of bread.
Interest Rates Over Time
Effective mortgage rates show what borrowers actually pay, split into new fixed deals and outstanding fixed loans.
How Do Interest Rates Affect House Prices?
Lower interest rates and higher house prices are linked - but the link isn’t instant. In the UK, most mortgages are fixed for 2, 3, or 5 years, so changes in rates take time to work through the system. When rates fall, only new buyers and those coming off a fixed deal feel it straight away. Everyone else is insulated. As cheaper deals roll through the market, buyers can borrow more, demand rises, and real house prices tend to follow - usually a year or two later. The same logic works in reverse: when rates rise, activity slows first, then prices weaken as households refinance onto higher payments.
- Built-in delay: Fixed-rate mortgages mean rate changes filter through gradually, not overnight.
- Transaction-led impact: Prices move when people buy and sell - not when rates change - so the number of transactions matters as much as affordability.
- Hikes bite quicker than cuts: Higher rates reduce new borrowing immediately, while lower rates take time to rebuild confidence.
- Inflation still rules: Even with low rates, real (bread-adjusted) prices can fall if everyday costs rise faster than wages.
- Why peaks lag: House price highs usually come after long periods of cheap credit, once most borrowers have rolled onto low rates.
Market Leaders
Top 5 Performers
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Under Pressure
Worst 5 Performers
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Key Regions
Explore bread-adjusted performance and house price trends for major UK regions.
Regional Comparisons
See how different regions stack up against each other when we adjust for bread prices. Compare trends, performance, and real‑term changes side by side.
Latest
Articles
How to Use the Comparison Tool
A step-by-step guide to comparing house price performance across different UK regions.
Regional Variations in UK Housing
Explore how house prices and affordability vary dramatically across different regions of the United Kingdom.
Understanding the Bread Index
Learn how the Bread Index uses everyday items to make house prices more relatable and understandable.