UK house price growth remained subdued in June and July 2026, with major indices reporting annual increases between 0.6% and 2.2% as economic uncertainty and higher mortgage rates dampened buyer activity.
According to Nationwide, annual house price growth reached 2.2% in June, up from 1.7% in May. The average property price stood at £299,330 in June, representing a monthly increase of 0.2% following a 0.2% decline in May, Lloyds reported.
Rightmove recorded a sharper than usual monthly decline of 1.0% (£3,832) in July, bringing the average asking price to £372,359. The typical July decline averages just 0.2% over the past decade.
Regional variations persist
Significant regional disparities continue to characterise the market. Wales led annual growth at 3.3%, followed by Scotland at 3.1% and the North West at 2.7%, according to Home.co.uk data. Northern Ireland recorded the UK’s strongest annual growth at 7.4%.
In contrast, Greater London showed flat annual growth at 0.0% in June, having halted a prolonged decline, whilst the South East recorded just 0.1% annual growth. The mix-adjusted average asking price for England and Wales rose 0.4% monthly to £366,398, with annualised growth at 0.9%.
Zoopla reported UK house prices up 1.4% year-on-year in June, with price inflation ranging from 3.5% in northern England to small declines in southern regions.
Mortgage rates and affordability constraints
Mortgage rates peaked at approximately 5% in April, having started the year at 4%, before beginning to decline. Average fixed mortgage rates currently stand around 5.6-5.7%, with the Bank of England base rate at 3.75%.
The impact of higher borrowing costs varies considerably by region. Zoopla data shows mortgage costs have increased £244 per month in London since January, compared to just £69 in the North East.
Robert Gardner, Nationwide’s chief economist, noted that “uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates” contributed to market softening. He added that recent declines in market interest rates “will help to restore household confidence and ease affordability constraints”.
Supply and demand dynamics
Market activity levels remain below 2025 figures, with sales agreed down 6-7% year-on-year according to multiple indices. However, Rightmove reported that the number of sales agreed in the first half of 2026 remained in line with 2024 levels.
Total unsold stock stood at 501,337 properties, up monthly but 7.8% below year-ago levels, whilst new instructions declined approximately 17% year-on-year. The median time to sell held at around 86 days.
Colleen Babcock, property expert at Rightmove, stated: “This month’s larger-than-normal price fall reflects the reality of a market where buyers have plenty of choice and sellers are having to work harder to stand out.” She noted that nearly three-quarters of homes sold in 2026 to date achieved their asking price without reduction.
The rental market showed mixed performance, with average asking rents broadly flat year-on-year at 0.2% for England and Wales. However, the North East recorded 10.5% annual growth and Wales 11.9%, whilst Yorkshire and the Humber declined 1.3%.
Zoopla forecasts price inflation will drift lower in the second half of 2026, with sales agreed on track to reach 1.1 million completions, representing a 6-8% decline from the previous year.
Amanda Bryden, head of mortgages at Lloyds, commented: “Recent price trends continue to reflect wider economic uncertainty. While affordability remains stretched for many buyers, mortgage rates have eased from their recent high, offering some encouragement to those considering a move.”
The market outlook remains dependent on inflation trends and household confidence, with the recent change in government presenting potential policy shifts on housing delivery and affordability measures.
