UK house prices remained flat at £277,484 in June 2026, following a 0.6% drop in May, slightly missing economists' expectations of a 0.1% increase [1, 2, 3]. The annual growth rate was 2.2%, showing modest year-on-year gains despite soft monthly performance [1, 2].
Mortgage rates stayed elevated with the average two-year fixed rate at 5.53% in late June, up from about 4.8%-4.9% in early March, reflecting ongoing tightening since earlier this year [1, 2]. Rates rose partly due to the Iran war, which spurred expectations of Bank of England interest rate hikes aimed at curbing inflation [1, 2, 3]. Despite recent slight declines from April highs, mortgage costs remain above pre-pandemic levels [1, 2, 3].
House price growth varied across regions, with Northern Ireland leading at an 8.6% increase year on year, while London prices rose 1.6% [1, 2]. The South East of England was the weakest performing region in the second quarter [1, 2].
Shares of some UK housebuilders fell following the release of Nationwide’s June housing market data, reflecting market caution [2]. Analysts noted mixed market sentiment. Robert Gardner, Nationwide chief economist, said, "If maintained, these trends will help to restore household confidence and ease affordability constraints, paving the way for a recovery in housing market activity in the coming quarters" [1]. Amy Reynolds, head of sales at Antony Roberts, added, "We expect a quieter, price-sensitive summer, with activity firming again in the autumn once buyers have more clarity on rates and the geopolitical noise has died down" [2]. Gareth Lewis, deputy CEO of MT Finance, observed, "We are seeing valuers cautious on value while buyers are looking for a steal and prepared to negotiate hard on price" [2].
Mortgage costs could drop further if the Bank of England does not raise interest rates again, as inflation and geopolitical tensions ease, potentially easing pressure on housing affordability [1, 2, 3]. Nationwide and Moneyfacts released this latest mortgage and house price data on July 1, 2026 [1, 2, 3].
