BLOGS

A tentative turning point for UK house prices

After a prolonged downturn, UK house prices have posted their first monthly increase since early 2026, according to the latest data from Lloyds and Nationwide. The rise is modest — both lenders point to gains in the region of 0.1-0.3% month-on-month — but it marks a psychological shift after more than a year of flat or falling values.

The picture is far from a clean recovery, though. RICS' latest Residential Market Survey shows new buyer inquiries remaining in negative territory, with more surveyors reporting falls than rises for the sixth consecutive month. That combination — prices ticking up while demand indicators stay soft — suggests the uplift is being driven more by constrained supply and cautious pricing than by a genuine rebound in buyer appetite.

For agents, lenders and investors, the headline national figure masks what REalyse's transaction and listings data consistently shows: a market moving at very different speeds depending on postcode.

Why the national average hides more than it reveals

Nationwide and Lloyds indices are built on mortgage approval data aggregated across the whole of the UK, which smooths out regional extremes. RICS' survey similarly reports a net balance figure at the national level. Neither captures the granular reality that REalyse's postcode-level comparables and price-paid data reveal.

Land Registry-sourced transaction data — the basis for REalyse's historic sold-price analysis — typically lags current market conditions by one to two months as sales complete and get registered. That means the most recent monthly figures should be read as directional rather than definitive, and the true scale of any recovery will only become clear as registrations catch up over the coming quarter.

What's already visible in listings and asking-price trends, however, is a widening gap between regions that are seeing renewed buyer activity and those still working through affordability pressure.

Regional winners: Midlands, North West and Scotland

REalyse data shows the strongest resilience — and in some cases outright growth — concentrated in the Midlands, North West England and parts of Scotland. Average sold £/sqft in several North West local authority areas has held up or nudged higher over the past 12 months, supported by relatively better affordability ratios and shorter days-on-market figures than the London average.

Scotland's market, buoyed by comparatively lower average price points and steady transaction volumes, has also shown less sensitivity to the rate environment than the South East. Days on market in several Scottish local authorities remain tighter than the UK average, a sign that realistic asking prices are still finding willing buyers.

The common thread across these outperforming regions is affordability headroom: buyers there are less exposed to the stretched loan-to-income ratios that have weighed on southern England, and gross yields for investors remain comparatively attractive — a factor REalyse's yield analysis flags as a continuing draw for buy-to-let activity in these areas.

London and the South East: still under pressure

The contrast with London and the South East is stark. Average price paid in large parts of inner and outer London has been broadly flat to negative year-on-year, and REalyse comparables show a persistent asking-to-achieved price discount wider than the national norm — evidence that vendors are still adjusting expectations downward to secure a sale.

Days on market across much of the South East remain elevated relative to the North and Midlands, reflecting the RICS survey's negative inquiry readings translating more directly into softer demand where prices are highest and mortgage affordability is most stretched. New-build completions and a comparatively fuller sales pipeline in parts of outer London have added further supply-side pressure, keeping sellers competing harder for a smaller pool of active buyers.

For lenders and investors underwriting deals in these areas, the message from the data is one of continued caution: relying on national price indices alone risks overstating recovery in markets that have yet to turn.

Outlook: a two-speed market, not a two-speed narrative

The first monthly price rise since early 2026 is a genuine milestone, but it shouldn't be read as evidence of a uniform recovery. RICS' negative buyer inquiry balance, set alongside sharply diverging regional performance in Land Registry and listings data, points to a market healing unevenly — with the Midlands, North West and Scotland leading, and London and the South East still finding their floor.

For anyone active in this market — investors screening for value, lenders assessing collateral risk, or agents advising vendors on pricing — the practical takeaway is the same: postcode-level comparables and local demand indicators matter far more right now than the national headline. As transaction data for the coming months feeds through, REalyse's regional breakdowns will be worth watching closely to see whether the North-South divergence narrows or deepens.