The pace of UK house price growth has slowed for the second consecutive month, with typical home values increasing by 2% year-on-year in the year to June. This figure represents a decline from the 4% and 3% growth recorded in April and May, respectively, according to the latest HM Land Registry data.
Between May and June of this year, average prices saw a modest rise of 0.1%, a contrast to the 1% increase observed during the same period in the previous year. This slowdown in early summer 2026 contrasts with the market's performance in 2025.
Despite the current cooling, the property industry maintains an optimistic outlook, anticipating a market rebound in September. Richard Donnell, executive director of research at Zoopla, attributed the summer's subdued activity to higher mortgage rates impacting buyer affordability and tempering price inflation. However, he noted that prolonged deferral of purchasing decisions is unlikely, and early indicators suggest a return of buyers in September and October.
Geographic disparities in price growth are evident across the country. The North West and North East of England have seen notable increases of 4.7% and 4.3% respectively. In Westmorland and Furness, within the North West, prices have surged by 11.1% over the year to June. Conversely, London has experienced an annual decline of 2.5% in average property values.
Within London, the City of Westminster has seen a significant drop, with prices falling 25.4% in the year to June, from £1.145 million to £854,000. However, a £9,000 increase in the average London home value over the past month has led some to suggest a potential turnaround for the capital's property market. Jonathan Hopper, chief executive of buying agent Garrington Property Finders, indicated that while annual price falls have persisted in London for ten months, there are growing signs of prices stabilizing. He suggested that opportunistic buyers are beginning to re-enter the market.
Hopper also expressed optimism for markets in the South West and East of England, where prices remain below pre-pandemic levels. He pointed out that an oversupply of properties in London and southern England has given buyers leverage, but this imbalance is expected to equalize, leading to increased competition for buyers in the south.
Higher mortgage rates, driven by inflation linked to geopolitical events and reversing expectations of Bank of England rate cuts, have increased costs for those remortgaging or purchasing homes. This underscores the importance of securing the best available mortgage rates and seeking professional advice.