UK house price growth decelerated for the third consecutive month in July, with London recording its eleventh straight month of annual price declines, according to provisional figures from the Office for National Statistics.
Average UK house prices increased by 1.4% in the year to July, down from 1.5% growth in June. The average property was valued at £273,000, though significant regional variations persisted across the country.
In England, average prices rose 1.1% to £293,000, while Wales recorded stronger annual growth of 2.6%, taking its average to £215,000. Scotland saw prices increase 2.3% to an average of £196,000.
London prices extend decline
London remained the weakest-performing English region, with average prices falling 3.3% over the year to July, compared with a 3.1% annual decline in June. The average London property was valued at £569,000, which is £19,000 below the peak recorded in July 2025.
Inner London recorded particularly weak performance, with the capital’s annual decline marking its largest since January 2024. The figures align with recent data showing prime London sales activity at its lowest August level since 2008.
The South West and West Midlands also contributed to the slowdown in overall English house price growth.
Pricing strategy becomes critical
Nick Leeming, chairman of Jackson-Stops, said the figures highlighted the importance of accurate initial pricing. “Today’s figures point to a market where realistic pricing increasingly determines which homes sell and those that stall,” he stated.
“Buyers are still there, but they are informed, selective and have more choice. That means sellers cannot rely on testing the market at an ambitious price and expecting buyers to follow,” Leeming added.
The comments come as property listings in England surged 16% in early September, potentially increasing buyer choice further.
Regional divergence widens
The North East recorded England’s strongest annual growth, with average prices increasing 4.9% in the 12 months to July, accelerating from 4% in June. The figures underscore widening price performance differences between parts of northern England and London.
Northern Ireland recorded the strongest growth of any UK nation, with average prices reaching £202,000 during the second quarter of 2026, up 9.2% year-on-year. That represented an increase of approximately £17,000 and marked Northern Ireland’s strongest annual growth since the final quarter of 2022.
Prices in Northern Ireland increased 2.1% between the first and second quarters of this year, compared with just 0.6% over the same period in 2025.
Market outlook
Nathan Emerson, CEO at Propertymark, said attention would turn to the Bank of England and the forthcoming Budget. “There are still challenges yet to overcome, and tomorrow’s base rate decision from the Bank of England will likely set the tone over the coming months regarding overall market confidence,” he commented.
The ONS cautioned that the latest UK House Price Index figures remain provisional and could be revised as more transaction data becomes available. The initial July estimate covers sales volumes representing approximately half of transactions completed across Great Britain during the month, with transaction volumes for recent periods and new-build properties remaining below historical levels.
