The focus of this study is to see how economic factors (Interest rates, Inflation rates and Gross National Income) affect the UK house prices. More specifically, how do the changes in house prices affect the UK Nationwide Mortgage rates? The author looked at quarterly data over the last 30 years from 1975 to 2004. In order to gain an insight into the relationship between house prices and the economic factors mentioned above, the author will estimate models for both UK house prices and UK Nationwide Mortgage rates.The findings of this study show that UK house prices are affected by many factors, and that there isn’t a strong enough factor that causes house prices to fluctuate on their own. It is found that several economic factors collectively cause distortions and fluctuations in the UK house prices. According to the models, Gross National Income influences house prices substantially. Mortgage rates were found to be dependent on interest rates more than UK house prices. Further analysis of the cointegration and sationarity of the data suggested that the models used were valid long-run models.