House prices flat amid slowest growth in almost three years

House prices were flat last month as the property market remains stable but struggles to flourish, the latest Lloyds data reveals.

Prices were unchanged in July, following a 0.2% rise in June, and up only 0.1% on the same time last year.

The average property price now stands at £299,253, compared with £299,396 in June. The annual growth rate is the slowest since November 2023.

Northern Ireland continues to record Britain’s strongest annual rise at 7.4%, according to the Lloyds house price data – which was formerly released under the Halifax brand, which is now being phased out.

Uncertain

Amanda Bryden, Head of Mortgages at Lloyds, says: “The UK housing market remained steady in July, with the average property price effectively unchanged over the month, following a slight rise of 0.2% in June.

“More broadly, average house prices have remained relatively stable for almost two years, moving within a narrow range over that period and sitting just 0.5% higher than they were in November 2024.

“That trend has persisted even as buyers and sellers have faced a more uncertain economic backdrop this year.”

Mortgages up

She adds: “Affordability remains a challenge for many would-be buyers and, following recent events in the Middle East, mortgage rates have edged higher again after easing earlier in the summer.

“Looking ahead, we expect market activity and house prices to remain relatively stable over the remainder of the year.”

Industry reaction

Nathan Emerson, CEO at Propertymark, says: “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.”

Nicky Stevenson, MD at Fine & Country, says: “June’s modest 0.2% increase in house prices is encouraging, but perhaps more importantly it reflects a market that has found a degree of stability rather than one experiencing a sharp rebound.

“Buyers remain active, mortgage approvals are improving, and transactions have edged higher year-on-year, demonstrating that there is still a healthy level of underlying demand.

“However, the market has become increasingly selective. With more properties coming onto the market, buyers have greater choice and stronger negotiating power than they have enjoyed for some time. That places an even greater emphasis on accurate pricing, as homes launched at realistic values continue to attract interest and sell, while those that come to market overpriced often require reductions and spend significantly longer waiting for a buyer.

“Looking ahead, ongoing geopolitical tensions, inflation risks and the prospect of interest rates remaining elevated mean we expect the market to continue progressing steadily rather than spectacularly. The fundamentals remain supportive, but success for sellers will continue to depend on aligning expectations with current market realities.”

Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts, says: “Although prices remain flat from a national average perspective, there is a regional divide with London and the South East continuing to lag.

London needs more support from Government, not less.”

“London needs more support from Government, not less. This is where the money is generated, yet policies like the proposed mansion tax disproportionately hit people who are already working long hours and enduring long commutes just to be here.

“ONS figures show over 420,000 people left London for other parts of the UK last year alone, the first real fall in the capital’s population outside of the pandemic in nearly four decades. It’s becoming harder to make the case that London is aspirational anymore, and that shift in sentiment matters for the market – buyers are voting with their feet.”

The UK housing market is not broken, but it is barely breathing.

Anthony Codling, MD Equity Research at RBC Capital Markets, says: “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.”

Mark Harris, Chief Executive of SPF Private Clients, says: “The Bank of England’s decision to hold interest rates for the fifth consecutive meeting is creating calm and stability, which is encouraging buyers and sellers to transact.

“In recent days, a drop off in swap rates, which underpin the pricing of fixed-rate mortgages, has enabled Nationwide, Halifax and Barclays to announce cuts in their mortgage rates, which had risen on the back of higher funding rates.

“With August tending to be a quieter time of year for the market, we expect other lenders to follow suit in an effort to drum up more business. This could present an opportunity for those buyers not distracted by the holidays to make their move.

“First-time buyers will be encouraged as house prices remain steady rather than soar. Lenders are working hard on offering solutions to those trying to get on the ladder for the first time, which is leading to a small improvement in their numbers.”

The seasonal bounce in house prices was more of a sideways drift this year.”

Tom Bill, Head of UK Residential Research at Knight Frank, says: “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.”

Jason Tebb, President of OnTheMarket, says: “The steadiness in pricing suggests buyers and sellers are adopting a pragmatic outlook and adjusting expectations.

“For those hoping to get on the ladder for the first time, this is a more opportunistic market to work with, with prices which are not running away with themselves and pricing would-be buyers out further.

“The steady interest rate environment, with the Bank of England holding base rate at five consecutive meetings, is providing a welcome calming effect. Affordability concerns remain, particularly as mortgage lenders have increased their rates in recent weeks, but borrowers on the whole are adapting to shifting market conditions.

“Political uncertainty and challenging economic conditions continue to form a backdrop, but the resilience of the market and the needs-based buyers and sellers who have no choice but to proceed, is evident.”

Iain McKenzie, Chief Executive of The Guild of Property Professionals, says: “The first monthly increase in house prices for four months is another sign that the housing market continues to demonstrate resilience despite an uncertain economic backdrop.

“While annual growth remains relatively modest at 0.6%, a return to positive monthly price growth suggests buyers and sellers are continuing to transact where pricing is realistic.

“There are certainly reasons for cautious optimism. Wage growth has remained stronger than many expected, inflation eased during June, and mortgage approvals have picked up, all of which are helping to support buyer confidence.

“At the same time, transaction levels have stabilised and sales agreed are holding broadly in line with previous years, underlining that demand hasn’t disappeared, it’s simply become more measured.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “No fireworks were expected or seen this month as activity continued steadily. Wage growth outpacing property price inflation continues to counter-balance the amount of stock, especially flats, overhanging the market as well as concerns over the likelihood of mortgage rate and inflation rises.

“We are increasingly hearing on the ground too speculation about property tax changes in the Budget becoming more of a factor in decision-making.

“The result is a stand-off between buyers and sellers but some price-softening if sellers are serious about getting their transactions over the line.”