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London | ReNews International Desk News
The United Kingdom’s housing market remained subdued in July 2026, with average property prices recording only a marginal monthly increase as higher borrowing costs, economic uncertainty and geopolitical tensions continued to weaken market momentum.
According to Nationwide Building Society’s latest house price report, the value of an average UK home rose by just 0.1% in July compared with the previous month. The average property price increased slightly to £277,542, up from £277,484 in June.
Annual house price growth also slowed to 1.8% in July, compared with 2.2% in June, reflecting weaker buyer confidence and softer market activity across several parts of the country.
Nationwide Chief Economist Robert Gardner said both property prices and housing market activity had remained weak in recent months because of an uncertain economic environment. He noted that geopolitical tensions and renewed conflict involving the United States and Iran had pushed energy prices and market interest rates higher, affecting expectations about inflation and future borrowing costs.
Uncertainty surrounding the Bank of England’s monetary policy has also added pressure to the market. The central bank’s Monetary Policy Committee kept its benchmark interest rate unchanged at 3.75% in July after annual inflation eased to 2.6% in June, down from 2.8% in May.
However, the latest rise in wholesale oil prices has renewed concerns that inflationary pressures could strengthen again. Three members of the nine-member committee voted to increase the Bank Rate to 4%, raising the possibility of tighter monetary policy at the next meeting scheduled for September.
Mortgage lenders usually adjust their rates in anticipation of changes in the Bank Rate. As a result, mortgage costs have already started increasing, creating further affordability challenges for buyers and potentially limiting housing demand during the coming months.
Despite the slowdown, housing industry representatives said stable prices indicated that the market was continuing to find a degree of balance. Propertymark Chief Executive Nathan Emerson said limited housing supply, changing borrowing costs and uneven levels of buyer demand were shaping market conditions.
He added that national figures concealed significant differences between regions, with some more affordable areas performing better than expensive markets where buyers faced greater affordability pressures.
Separate figures released by HM Revenue and Customs showed that approximately 98,700 residential property transactions were completed across the UK in June. This was around 2% higher than in June 2025 and marginally above the total recorded in May 2026.
Property analysts said transaction levels remained resilient but were not particularly strong. They also warned that official transaction data often reflected decisions made several months earlier because property purchases were taking much longer to complete.
Search Acumen Managing Director Andrew Lloyd said June usually produced a seasonal increase in transactions, but the latest figures showed only a modest improvement. He said completion times had become longer than at any point in recent decades, meaning transaction statistics often reflected market sentiment from six to nine months earlier rather than current conditions.
The latest market slowdown follows several months of uneven performance. Annual house price growth stood at 2.2% in June, although prices were unchanged on a monthly basis. In May, annual growth slowed to 1.7%, while average prices fell by 0.6% month on month.
The asking-price market also showed signs of weakening during the early summer. Rightmove reported that average new seller asking prices fell by 0.6% in June, the largest June decline recorded in 14 years. The average asking price dropped to approximately £376,191, as a high number of homes for sale increased competition among sellers.
Property supply remained historically high for the time of year, giving buyers more choice and greater negotiating power. Analysts said sellers were increasingly being forced to set realistic asking prices, particularly for flats and properties in areas where affordability remained stretched.
Regional differences continued to be significant. Property prices in southern England and Wales faced greater downward pressure, while more affordable markets in northern England and Scotland remained comparatively resilient.
The North East and Scotland recorded annual asking-price increases of approximately 3.3% and 3.2%, respectively, while London and parts of southern England experienced weaker conditions.
First-time buyers have benefited to some extent from slower price growth, increased housing supply and a wider selection of high loan-to-value mortgage products. However, higher mortgage rates and broader cost-of-living pressures continue to limit affordability for households that depend heavily on borrowing.
Market data also showed that homeowners generally remain in their properties for significantly longer than tenants. According to the English Housing Survey, people spend an average of around 14 years in the same home.
Homeowners remain in their properties for an average of approximately 24 years, while private renters spend around five years in one residence. People who own their homes outright without a mortgage typically remain in the same property for 30 years or longer.
The outlook for the UK housing market is expected to remain closely linked to inflation, energy prices and future Bank of England interest-rate decisions. A further increase in borrowing costs could weaken buyer demand and place additional pressure on house-price growth.
However, limited housing supply, wage growth and continued demand from households that need to move may help prevent a sharper decline. Analysts believe that the market is more likely to experience a prolonged period of slow growth and uneven regional performance rather than a sudden fall in national property values.

A sustained recovery in the US housing market will depend heavily on mortgage rates easing, according to a survey of real estate agents who say high borrowing costs are discouraging both buyers and sellers.

The Real REMAX Group’s Agent Optimism Index, which measures agents’ 12-month outlook on a scale of 0 to 100, fell to 45.8 in September from 54.3 in August. The decline reflects growing concern that mortgage rates will remain too high to bring more buyers into the market. In the firm’s monthly survey, conducted from October 1 to 9 and released on October 30, 65% of 177 agents said 30-year mortgage rates would need to fall below 6% to meaningfully stimulate buyer demand. More than one-third, or 37%, said rates would need to drop below 5.5%.

High rates are already affecting housing activity. Two-thirds of respondents said buyers were pausing or delaying their home searches. Sellers are also holding back: 39% of agents reported that prospective sellers had postponed plans to list their homes.
Some sellers are responding to the slowdown by becoming more flexible on price and terms. Thirty-five per cent of agents said they had seen sellers reduce asking prices, while 34% reported sellers offering concessions to attract buyers.

The outlook for prices is also weakening. If mortgage rates remain around 7% next year, nearly 60% of survey respondents expect home prices to fall. About 33% anticipate a decline of more than 5%.
“Higher mortgage rates are putting renewed pressure on an already challenging housing market,” Real REMAX Group Chairman and CEO Tamir Poleg said in a statement accompanying the survey. Poleg said buyers had gained more negotiating power, but affordability remained a major barrier, prompting many to delay their searches. He added that a lasting recovery in housing activity would depend substantially on meaningful mortgage rate relief.

The survey’s findings echo Goldman Sachs’ outlook for the US housing market in 2027. The firm’s economists expect existing-home sales and new-home construction to decline. They forecast 3.9 million existing-home sales next year, alongside a modest 0.8% rise in home prices.

Goldman Sachs economists Ronnie Walker and David Mericle said that many homeowners who refinanced at low rates in 2020 and 2021 now face a significant financial cost if they move while current mortgage rates remain high.