22nd Jul 2026 10:32
(Alliance News) - The average UK house price increased by 2.7% in the 12 months to May, slowing from a 3.9% annual increase in April, the Office for National Statistics said Wednesday.
Across the UK, the typical house price in May was GBP271,000.
Average house prices increased in May to GBP292,000, a 2.3% annual increase, in England, GBP215,000, 4.2%, in Wales, and GBP196,000, 4.4% in Scotland.
The average house price for Northern Ireland was GBP198,000 in the first quarter of 2026 – a 7.4% annual increase.
Within England, the North East was the region with the highest annual house price inflation in May, at 5.9%.
London had the weakest annual house price inflation, with prices there falling by 3.7% annually in May.
This is the ninth month in a row with an annual fall in house prices in London, the report said.
Richard Donnell, executive director of research at Zoopla said: "Political change, the World Cup, a scorching summer and elevated mortgage rates have hit housing market activity this summer.
"Zoopla's very latest data shows 20% fewer buyer inquiries than a year ago and 7% fewer sales agreed.
"This comes as annual house price growth in the ONS index has already slowed to 2.7% in the 12 months to May. We expect activity to pick up in the autumn as the outlook becomes clearer."
The ONS said that the slowing in the UK annual rate of house price inflation was caused by a "base effect" from the aftermath of stamp duty changes in England and Northern Ireland in April 2025, which was similar to stamp duty effects seen previously.
Its report said: "The annual rate slowed in May 2026 because average UK house prices rose by a smaller amount [0.3%] between April and May 2026 than in the same period a year ago [1.5%]."
The average monthly private rent in the UK was GBP1,388 in June – GBP44 [3.3%] higher than 12 months earlier – the ONS said.
The figures were released as the ONS also said that the consumer prices index rate slowed reach to 2.6% in June, from 2.8% in May.
This was the lowest level since March 2025, and below a 2.7% rate expected by some economists.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Inflation easing to 2.6% is welcome news as far as interest rates are concerned but renewed tensions in the Middle East mean the inflationary threat has not completely rescinded.
"Although the Bank of England is expected to hold base rate again next week, rising swap rates, which underpin mortgage pricing, have led a number of lenders to increase their mortgage rates, with others expected to follow."
He added: "The higher cost of living is impacting household affordability, which means those buying a home are being careful as to what they are prepared to spend."
David Hollingworth, associate director at L&C Mortgages said: "The mortgage market had been moving in a positive direction, with lenders gradually reducing rates and giving borrowers improved choice.
"However, that downward momentum has ground to a halt, as uncertainty in financial markets has pushed lenders' funding costs higher, prompting a growing number to increase their fixed-rate deals."
He added: "Borrowers shouldn't feel they have to panic, but they also shouldn't delay reviewing their options.
"Mortgage rates can move quickly, as we have seen over the past week, so anyone approaching the end of their current deal or planning to buy a home should consider securing a competitive rate sooner rather than later.
"Most lenders will still allow borrowers to switch to a cheaper deal before completion if rates ease again, giving them certainty now and flexibility if the market moves in their favour later down the line."
Jason Tebb, president of OnTheMarket, said: "Lenders have started increasing their mortgage rates on the back of higher swap rates, but with inflation easing to 2.6% in the year to June, hopefully the Bank of England will hold base rate again at the next meeting."
Iain McKenzie, chief executive of The Guild of Property Professionals, said: "With more homes available than we've seen for some time, purchasers are spoiled for choice, and sellers face much greater competition.
"In this environment, realistic, evidence-based pricing is essential.
"Homes launched at the right price continue to attract interest and secure sales, whereas properties brought to market too ambitiously are taking significantly longer to sell after price reductions."
Nathan Emerson, chief executive of property professionals' body Propertymark, said: "Today's figures are positive for sellers and show that the housing market remains resilient despite domestic and international pressures.
"However, affordability concerns continue to challenge many buyers, particularly first-time buyers."
Karen Noye, a mortgage expert at wealth manager Quilter said: "For buyers, the key point is not simply what a lender is willing to offer, but what remains comfortably affordable.
"Stretching to the maximum may feel necessary in a competitive market, but it leaves little room for unexpected costs, income changes or future rate volatility.
"Building in a margin for error can help ensure a purchase remains sustainable even if economic uncertainty persists for longer than expected."
By Vicky Shaw, Press Association Personal Finance Correspondent
Press Association: Finance
source: PA
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