House Price Index: June 2026

UK residential house prices recorded modest yearonyear growth of 1.4% in June 2026. Gradually easing mortgage rates and resilient demand in selected regions have supported the market, though performance varies widely across the country. Improving affordability has helped stabilise housing conditions.

Key Takeaways

• Higher mortgage costs together with political uncertainty have reduced the pool of active homebuyers. Agreed sales in June were 7% lower yearonyear.
• Annual houseprice inflation softened to 1.4%.
• Mortgage rates peaked at 5% in April, up from below 4% at the start of 2026, and have since edged downwards.
• Since January, monthly mortgage repayment increases amount to £244 for buyers in London compared with only £69 in the North East, showing large regional disparities in raterelated stress.
• Lower sales volumes were observed across most regions. Northern England reported annual price growth up to 3.5%, while parts of southern England recorded modest price falls.
• Further cooling of price growth is expected in H22026. Property completions for the full year are projected to drop by 68% versus 2025, reaching approximately 1.1 million transactions.

Average UK House Prices Over the Past 3 Months

The average UK house price stands at £271,900, representing a 1.50% (£4,030) increase over the past 12 months.

Buyer Confidence Softens While Underlying Housing Demand Remains

Housemoving aspiration remains strong across the country. Nevertheless, higher borrowing expenses and broader macropolitical uncertainty have caused many buyers to delay final commitments.

Over the June reporting period, agreed sales were approximately 7% below the prioryear level, and buyer enquiries fell by roughly 15%, a trend observed throughout 2026. Recent political shifts together with uncertainty around AutumnBudget taxandspending plans have reinforced cautious sentiment, encouraging many purchasers to adopt a waitandsee stance.

Historical market patterns show episodes of activity slowdown (such as following the 2022 minibudget shock) tend to reverse once mortgage rates stabilise and begin falling.

Higher Mortgage Repayments: Uneven Regional Impact

Average fiveyear fixed mortgage rates stood below 4% in January and peaked close to 5% in April. Based on a typical 75%LTV, 30year mortgage against the nationalaverage home value, monthly repayments rose by roughly £125 (£1,500 per annum).

Ratedriven repayment burdens differ sharply by geography. London buyers faced an extra £244 per month (£2,900 annually), versus £69 per month (£830 annually) in the North East. At the April rate peak, monthlypayment increases for London firsttimebuyers reached £232 — nearly 3.5 times the £66 increase experienced by firsttime buyers in the North East.

Mortgage rates eased to an average of 4.8% in May. Further falls in borrowing costs will be required to materially lift affordability and support housingtransaction volumes in the second half of 2026.

Large Divergence Across Regions & Property Segments

Sales Performance 

 Northern England and Scotland face milderaffordability pressure; sales are down 36% yearonyear.

 Parts of Wales, SouthWest England, East of England and East Midlands recorded sales declines above 10%.

Propertysegment dynamics 

Two and threebedroom houses are still transacting close to prioryear speeds in most locations. The flat segment remains the weakest category; over twothirds of one and twobed flats marketed in 2026 remain unsold.

Flatmarket weakness disproportionately affects firsttime buyers, who are most exposed to rising borrowing costs. In addition, London firsttime buyers encounter stampduty costs of around 3% of purchase price, compared with less than 1% for counterparts in northern England.

For vendors whose properties have been listed since spring without receiving offers, reviewing askingprice alignment with currentmarket conditions via local agents is strongly recommended.

Positive but Decelerating HousePrice Growth

Cooling salesactivity is feeding into slower houseprice inflation, which softened to 1.4% yearonyear. The index draws heavily on sales agreed before April’s fullratehike impact.

Houseprice inflation is forecast to weaken further through autumn unless mortgage rates drop below 4.5% and sales volumes recover.

Annual price growth reaches 3.5% across the NorthEast and NorthWest and 3.0% in Scotland amid constrained supply. London has recorded nine consecutive months of negative annual price change at 0.2%, and the SouthEast stands at 0.3%. Realistic askingprice setting is critical for vendors in London and southern England to achieve completions in 2026.

H22026 Market Outlook

Current annual houseprice inflation sits at 1.4%, and is expected to drift towards 1% in H22026. Northern England and Scotland are expected to show greater price resilience, while London and the SouthEast are likely to stay flat or see modest falls.

Mortgagerate movements will be the dominant market driver. Rates falling below 4.5% would improve affordability and unlock buyer demand. Political developments including the new Prime Minister and Autumn Budget will also shape sentiment.

Agreed sales have weakened recently, though spring2026 activity was broadly comparable with 2025. Because H22025 volumes were already subdued ahead of that year’s Autumn Budget, yearonvolume gaps should narrow in Q3Q42026 even without a strong market rebound. Higher borrowing costs mean fullyear sales declines will be larger than earlieryear projections.

Elevated stock levels across southern England give buyers greater choice, making realistic pricing more important than ever. Appropriatelypriced homes continue to attract interest and secure sales.

Firsttime buyers remain the most ratesensitive group, especially in affordabilitystretched London. Any further interestrate reductions will deliver the fastest demand response from this cohort.

Guidance for Different Market Participants

Firsttime buyers

Market conditions have improved compared with 18 months ago. More properties are available for sale; mortgage rates have recently retreated, and motivated vendors are open to negotiation. Still, many firsttime buyers remain on the sidelines. Speak to a mortgage broker and fully assess your personalaffordability position before proceeding.

Homemovers

In most parts of the country, wellpriced properties are selling at speeds similar to 2025, while buyers enjoy wide selection. Always seek accurate localagent pricing advice prior to making offers or listing your own property.

Sellers in London & Southern England

Buyers have more stock to choose from than one year ago and take longer to commit. Genuine buyers are present but are highly selective. Realistic pricing is key to generating enquiries. Overpricing leads to extended marketing times; subsequent price cuts are more damaging than setting realistic askingprices from launch.

Data Notes

This housepriceindex tracks achieved transaction prices (not advertised asking prices), drawing on completed sales, mortgage valuations and newlyagreedsale datasets. The index is revised and nonseasonallyadjusted.

 Salesactivity metrics compare the fourweek period ending 23 June 2026 against the equivalent 2025 window.

 Mortgagerate figures reflect new 75%LTV fiveyear fixedrate products.

 Repayment estimates assume 75%LTV, 30year mortgage terms.  Flat

stock analysis is based on GreatBritain listings in the first 20 weeks of 2026.