The Lloyds House Price Index from July shows annual UK house price growth has slowed to its weakest rate since November 2023, with property values remaining broadly unchanged during the month and just 0.1% higher than a year earlier.
According to the index, the average property price was £299,253 in July, down £143 from £299,396 in June.
Here’s how the industry reacted –
Anthony Codling, RBC Capital Markets, managing director, equity research: “The UK housing market is not broken, but it is barely breathing. At £299,253, the average UK house price sits just a whisker below the psychologically important £300,000 mark, unchanged on the month and growing at only +0.1% annually, the slowest rate since November 2023.
“The narrative here is one of suspended animation: prices are neither falling sharply nor rising with any conviction, trapped in a narrow two-year range by the twin vices of stretched affordability and mortgage rates that refuse to fall far enough for long enough.
“Geopolitical ructions in the Middle East have given lenders an excuse to nudge rates back up just as they had begun to ease, reinforcing the ceiling on buyer appetite. Transaction volumes remain well below year-ago levels and RICS survey data continues to paint a subdued picture of demand.
“The market is not in crisis, but the green shoots that flickered briefly in early 2026 have wilted.
“For UK housebuilders, stable prices are better than falling ones, but at these activity levels, volume recovery remains elusive and earnings upgrade momentum is hard to sustain. We see a modestly cautious backdrop for the sector.”
Nathan Emerson, CEO of Propertymark: “There is no denying that 2026 has presented affordability challenges for both existing homeowners and first-time buyers. 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: “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.”
Karen Noye, mortgage expert at Quilter: “The housing market is increasingly at the mercy of events far beyond the UK housing sector itself. From geopolitical tensions in the Middle East to shifting expectations for interest rates, buyers are having to factor global uncertainty into what is often the biggest financial decision of their lives.
“While house prices have remained relatively resilient, the outlook for mortgage rates has become less certain. Fixed mortgage pricing is heavily influenced by swap markets, which have become increasingly sensitive to both domestic economic data and international developments. Recent tensions in the Middle East have the potential to influence inflation expectations and, in turn, market views on the future path of interest rates. This is a lot for buyers to grapple with.
“It is also worth remembering that this is traditionally a quieter period for the housing market. During the summer months many households swap house hunting for holidays, naturally softening activity levels and taking some momentum out of price growth.
“Underlying demand for homeownership remains strong, but affordability continues to be the market’s biggest challenge. Even as lenders compete hard for business, mortgage costs remain significantly higher than many buyers have become accustomed to over the past decade.
“Looking ahead, house prices are likely to remain highly sensitive to movements in mortgage rates and broader economic confidence. The market is continuing to move forward, but buyers and sellers alike are keeping a close eye on developments at home and abroad before making major financial commitments.”
Joe Nellis, head of economic research at MHA: “A shortage of residential properties for sale on the market has prevented prices from collapsing, but overall activity remains far below the levels seen when record-low mortgage rates just a few years ago fuelled a surge in demand.
“The issues remain affordability and supply. Measures to ease the cost of living have been introduced already, but these remain small, unlikely to shift the balance in favour of potential homeowners.
“At the same time, the prime minister has committed to the largest drive in council house building since the Second World War. Increasing the supply to match demand would help to ease affordability concerns, but, as previous administrations have shown, this is a monumental task.
“Until the gap between earnings and property prices narrows much more substantially, affordability will remain the defining challenge facing the UK housing market and the next generation.”
Comments (3)
The free HPI figures are only available up to March so far.
In my local area, Arun District Council, there have been 473 transactions Jan to March 2026 which most likely relate to sales agreed in the last three/ four months of 2025. Other than 2009, this is the lowest Q1 that has ever been. When you consider the number of new builds being constructed and sold down here, that’s a crazy low figure.
Using UK Land Registry data, peak transactions were in 2002 when 4993 transactions were registered. Lowest ever was, unsurprisingly, 2008 when 2212 properties got sold.
Pre credit-crunch, the average total number of transactions per year was 4228.
Post credit-crunch, the average total drops to 3010.
That’s a drop of 28.8% in the number of residential properties changing hands per year on average.
If transaction levels continue as they appear to be for the rest of the year, I can imagine that fewer properties will be sold in my local authority area than during Covid (2677) and if its really bad it could be fewer than during the worst year of the credit crunch.
We’ll have to wait to see how things pan out, but I think that regardless of prices, transaction levels will almost certainly end up being at a record low.
As an aside, one of my next door neighbours agreed a sale on their property 18 months ago at £395,000 but had to withdraw due to “personal reasons” (whatever those might have been). She has just put her house back on the market at £365,000 and will most likely have to take an offer. As most vendors would be, she’s not happy about the value of her house dropping, but her target is to buy a flat up in London and apparently she’s going to be significantly better off now than she was before!
UK house price growth slowed to 0.1% in July, the weakest annual rate since November 2023, according to the Lloyds House Price Index. Time to be precise about what that number actually is.
Lloyds runs on the Halifax methodology, the same approach used by Nationwide and the ONS/Land Registry UK HPI. It builds a “typical” property from a fixed set of characteristics and prices that instead of the average of what actually sold. Useful for comparing like with like over time. Built to answer one question: is the market broadly up or down.
It was never built to answer a different question. What happened to prices in your market.
There are more than 3,000 distinct local markets and sub-markets in the UK. Leasehold flats in London are having a rough time right now. Other areas, within the same national average, show a clear uptick. Both are true at once. A single hedonic regression collapsing 3,000+ markets into one national percentage describes neither. It describes an average of the two, which describes no market anyone actually transacts in.
Agent income does not run on a regression coefficient. It runs on the price achieved on the property that sold. Land Registry completions data, actual transaction prices, no model applied, shows a 2025 average of £367,715. Halifax/Lloyds shows £299,253. That gap is not noise. It is two different definitions of “average” answering two different questions.
Volumes tell the same story. National transaction counts fell from 1,086,032 in 2021 to 718,143 in 2025. That fall is not evenly spread across those 3,000+ markets either.
If you are an agent reading a national percentage and wondering why it does not match what you are seeing on the ground, the answer is simple. It was never designed to.
Well if house prices are increasing at +0.1% annually and official inflation is 2.8% (and that’s suspect) then expect to read ‘house prices plummeting’ on the daily mail front page soon.