According to Nationwide Building Society data released on July 1, UK house prices rose 2.2% year-on-year by June 2026, accelerating from May's 1.7%. However, on a monthly basis, prices remained at the same level, indicating stagnation in the market. The average cost of a property is now 277,484 pounds.
Robert Gardner, Chief Economist at Nationwide, attributes the cooling market to uncertainty caused by the conflict in the Middle East and the subsequent rise in energy prices and market interest rates. According to him, consumer confidence and sentiment in the housing market weakened, and the number of mortgage approvals decreased markedly in May. HMRC data complements this picture: the number of residential real estate transactions in May decreased by 2% compared to April, from 100,440 to 98,450.
Gardner stressed that if the energy crisis continues to weaken, the Bank of England may not have to raise interest rates or the increase will be less than expected, especially since inflation has been below forecasts in recent months.
Analysts, however, are more restrained. Andrew Lloyd of Search Acumen warned that the decline in market confidence is already turning into a weakening of the flow of transactions. According to him, the leading indicators point to further deterioration: Zoopla reports a 15% drop in demand from buyers and a 7% decrease in the number of agreed transactions year-on-year, while Bank of England data shows a 14.9% drop in the number of mortgage approvals. London, according to Lloyd's, was the hardest hit.
Against this background, there is encouraging news for buyers: the cost of fixed-rate mortgages decreased in June. The average rate on two-year loans fell from 5.68% in May to 5.53%, and on five-year loans it also fell to 5.53% from 5.63% a month earlier. Nathan Emerson of the Propertymark association urged sellers to remain optimistic, but reminded them of the critical importance of realistic pricing: houses priced at the right price continue to be in demand, while overpricing can quickly reduce dynamics.
Source: Forbes
.jpg)