BLOGS

A market that looks stable on the surface

Look at the headline numbers and the UK sales market seems to be finding its feet. Nationwide put annual house price growth at 2.2% in June, up from 1.7% in May, with the average UK home now valued at £277,484. Lloyds' House Price Index (formerly Halifax) told a similar story, recording the first monthly rise in four months, up 0.2% in June to an average of £299,330, with annual growth ticking up to 0.6%.

On paper, that reads like a market steadying itself after a difficult start to the year. But the sales-side data tells a different story, and it's the gap between the two that matters most for anyone buying, selling, or underwriting UK property right now.

Buyer demand still hasn't turned the corner

RICS' UK Residential Market Survey is the clearest signal that price stability isn't the same as market health. New buyer enquiries posted a net balance of -29% in June, an improvement on the -34% recorded in April and May, but still firmly negative. Agreed sales were unchanged at -37% in May, meaning far more surveyors are reporting falling transactions than rising ones.

Perhaps the most telling metric is time to complete. RICS recorded an average of 21.5 weeks from listing to completion in May, the longest since the survey began tracking this measure in 2017. Deals are getting done, but far more slowly, which points to buyers negotiating harder, chains taking longer to align, and financing decisions taking more time to firm up.

Transaction volumes back this up. HMRC recorded 98,450 UK residential transactions in May 2026, down 2.0% month on month on a seasonally adjusted basis, while Bank of England data showed mortgage approvals falling 14.9% to 56,205, also down compared with May 2025. Fewer approvals today typically mean fewer completions two to three months out, so the soft patch in demand indicators has a real chance of showing up in price data later in the year.

Why the headline price figures can mislead

Nationwide and Lloyds indices are built from mortgage-approval and completion data, which naturally lags the RICS enquiry and instruction figures by weeks or months. That lag means the "modest growth" being reported now largely reflects deals agreed back when sentiment was less fragile. If buyer enquiries and agreed sales stay negative through the summer, REalyse data across sold price per square foot and asking-to-achieved discount levels would be the first place to look for confirmation that the slowdown is feeding through to completions, well before it shows up in the next set of headline indices.

A market splitting by region and price point

Both the mortgage lender indices and RICS point to a widening North-South divide. Nationwide's regional breakdown shows Northern Ireland as the standout performer, with prices up 8.6% year-on-year in Q2 2026, while the Outer South East recorded just 0.1% annual growth. RICS members have consistently flagged the South East and East Anglia as the weakest spots for price momentum, while the North West, North of England, Scotland and Northern Ireland continue to post positive readings.

This isn't a uniform "stall" so much as a market moving at very different speeds depending on geography and price bracket. RICS contributors have repeatedly noted that demand holds up better for realistically priced stock in the mainstream market, while pricier homes above roughly £400,000 face more selective buyers and longer negotiation. For sellers and agents, that reinforces the value of postcode-level comparables and district-level sold price benchmarks rather than relying on a single national average to set expectations.

What this means for the rest of 2026

Forecasters are broadly aligned on modest full-year growth. Lloyds expects UK house prices to rise between 1% and 3% in 2026, while other major forecasters cluster around a similar 1.5% to 4% range, contingent on mortgage rates continuing to ease from their post-Middle East-conflict highs. That's a reasonable base case, but it assumes buyer demand recovers from its current negative readings, something RICS data has yet to confirm.

The more useful read for anyone active in the market isn't the annual growth number alone. It's the combination of price direction, transaction volumes, mortgage approvals and time-to-complete together. Right now, those four measures aren't all pointing the same way, and that mismatch is the real story behind this summer's "stable" house prices.

For sellers weighing up whether now is the right moment to list, or investors assessing entry points across different UK regions, comparing local sold price and asking price trends against national averages, alongside gross yield and days-on-market data for the specific area and property type, gives a much clearer picture than the headline figures alone.