UK house prices were unchanged in July, holding at an average of £299,253 after a 0.2% rise in June, as annual house price growth slowed to 0.1%, its weakest pace since November 2023, according to the latest data released by Lloyds.
Annual growth at this level means prices have moved within a narrow band for close to two years. The average property is just 0.5% more expensive than it was in November 2024, with affordability pressures and sensitivity to borrowing costs keeping a ceiling on values.
"The UK housing market remained steady in July, with the average property price effectively unchanged over the month (-£143), following a slight rise of +0.2% in June," said Amanda Bryden, head of mortgages at Lloyds. "At £299,253, the average house price is now +0.1% higher than a year ago, the slowest rate of annual growth since November 2023.
"More broadly, average house prices have remained relatively stable for almost two years, moving within a narrow range over that period and sitting just +0.5% higher than they were in November 2024. That trend has persisted even as buyers and sellers have faced a more uncertain economic backdrop this year.
"Affordability remains a challenge for many would-be buyers and, following recent events in the Middle East, mortgage rates have edged higher again after easing earlier in the summer.
"Sensitivity to borrowing costs is reflected in the latest industry data, which show a modest increase in both mortgage approvals and completed transactions in June, following a bigger dip in May. While housing demand remains broadly steady, activity continues to respond quickly to changes in mortgage rates.
"Looking ahead, we expect market activity and house prices to remain relatively stable over the remainder of the year. Developments will be shaped by both how mortgage rates respond to the outlook for inflation and wider household confidence."
Regional divergence sharpens
The national picture conceals significant variation at regional level, with a clear north-south divide running through the data. Northern Ireland remains the strongest performer, with annual house price growth of 7.4% taking the average property value to £231,131. Scotland recorded 3.6% annual growth to £223,246, and Wales posted 1.6% growth, lifting the typical property value to £231,458.
In England, the strongest growth is concentrated in the north. The North East saw prices rise 2.8% year-on-year to £182,488, while the North West grew 2.1% to £247,836.
Southern markets are pulling in the opposite direction. The South East recorded a 2.0% annual fall to £381,146, and Greater London declined 1.3% to £533,930.
Industry reaction
"Although prices remain flat from a national average perspective, there is a regional divide with London and the South East continuing to lag," says Amy Reynolds, head of sales at Richmond estate agency Antony Roberts. "London needs more support from Government, not less. This is where the money is generated, yet policies like the proposed mansion tax disproportionately hit people who are already working long hours and enduring long commutes just to be here.
"ONS figures show over 420,000 people left London for other parts of the UK last year alone, the first real fall in the capital's population outside of the pandemic in nearly four decades. It's becoming harder to make the case that London is aspirational anymore, and that shift in sentiment matters for the market – buyers are voting with their feet."
"There is no denying that 2026 has presented affordability challenges for both existing homeowners and first-time buyers," comments Nathan Emerson, chief executive of Propertymark. "However, buying a home is a long-term commitment, and the housing market naturally does experience fluctuations influenced by wider economic and global factors.
"With interest rates remaining steady and inflation unexpectedly falling last month, conditions may be improving to better support greater buyer confidence as the year progresses.
"However, lower mortgage applications and reduced lending over the previous quarter are likely to continue influencing market activity in the months ahead. Economic recovery also has the potential to vary by region, while changing political priorities could shape housing policy differently across individual nations across the UK too."
Tom Bill, head of UK residential research at Knight Frank, said, “The seasonal bounce in house prices was more of a sideways drift this year thanks to rising mortgage costs and renewed political uncertainty around property taxes.
"Budget speculation has calmed down after a land value tax was ruled out but familiar questions remain about which groups the Chancellor will target next. The erratic course of the Middle East conflict will also have a bearing on demand as borrowing costs fluctuate but second-round inflationary pressures have so far appeared manageable.
"Affordability continues to shape the house price map of the UK, with London and the south-east under-performing less expensive regions.”
