Annual UK house price growth slowed to 2.7% in May, down from a revised 3.9% in April, according to the latest UK House Price Index from the Office for National Statistics and HM Land Registry.
The average UK property was valued at £271,000, £7,000 higher than a year earlier.
Prices increased by 0.3% between April and May on a non-seasonally adjusted basis but were unchanged after seasonal adjustment.
The slowdown in annual inflation was attributed to a base effect following the stamp duty changes introduced in England and Northern Ireland on 1 April 2025. Average prices rose by 0.3% between April and May this year, compared with a 1.5% increase during the same period in 2025.
AROUND THE REGIONS
Northern Ireland recorded the strongest annual growth across the UK, with prices rising by 7.4% to an average of £198,000 during the first quarter of 2026.
Prices increased by 4.4% to £196,000 in Scotland and by 4.2% to £215,000 in Wales. England recorded more modest growth of 2.3%, taking its average property price to £292,000.
The North East was the strongest-performing English region, with annual price growth of 5.9%. London was the weakest market, recording a 3.7% fall.
HM Revenue & Customs figures showed that an estimated 98,000 residential transactions worth at least £40,000 completed during May on a seasonally adjusted basis.
That was 16.6% higher than in May 2025 but 2% lower than in April.
Bank of England data also showed mortgage approvals for house purchases falling to 56,200 in May, below the average of 63,300 recorded over the previous six months.
Meanwhile, average UK private rents increased by 3.3% in the 12 months to June, unchanged from the annual growth rate recorded in May.
The average monthly private rent reached £1,388 across the UK.
In England, rents increased by 3.4% to £1,446 a month. Wales recorded the strongest national rental growth, with average rents rising by 4.9% to £843.
Average rents in Scotland increased by 1.3% to £1,012. The latest figures for Northern Ireland showed rents rising by 2.9% to £877 in the 12 months to April.
Within England, the North East recorded the highest annual rental inflation at 6.3%, while London had the lowest at 2.2%.
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “The 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.
“Following yesterday’s inflation data, attention will now turn to the Bank of England’s base rate decision later this month, while Ofgem’s next energy price cap announcement, due in August, will also be closely watched.
“In addition, with Andy Burnham now Prime Minister, and a level of uncertainty surrounding the UK Government’s housing policy continuing, this could weigh on consumer confidence over the coming months as well.”
RENTAL PRESSURES
And he adds: “The rental sector continues to face intense pressure, with around seven people approaching Propertymark member agents for every available property they have on offer.
“Ultimately, we need to see a significant increase in the number of rental properties entering the lettings market to keep pace with growing demand and help ease overall costs for many renters.
“It is important that housing continues to take centre stage across all nations individually, especially considering there are still many uncertainties in the wider economy to contend with.”
SUMMER SCORCHER
Richard Donnell, Executive Director of Research at Zoopla, says: “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 enquiries 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.”
SELECTIVE BUYERS
Nick Leeming, Chairman of Jackson-Stops, says: “The latest figures suggest the housing market has maintained positive price growth through the spring, supported by steady underlying demand.
“The market is becoming increasingly balanced, with buyers exercising greater choice and sellers recognising the importance of realistic pricing.
“Across the country, we continue to see strong demand for well-presented homes that are priced in line with local market conditions.
“At the same time, increased levels of available stock are creating a more competitive environment, meaning ambitious pricing strategies are less likely to succeed than they were in more supply-constrained markets.
“Recent indicators suggest buyers are becoming increasingly selective as affordability pressures and borrowing costs continue to influence decision-making. Our latest research found that 42% of those whose moving plans had been delayed cited economic uncertainty as a reason, underlining the importance of greater stability and policy certainty in sustaining market activity.
“This is creating a more considered market where transactions are being driven by value and quality rather than urgency.”
STAMP DUTY BARRIER
And he adds: “There is also a strong case for addressing the costs that discourage existing homeowners from moving. Our latest research suggests that removing stamp duty costs could bring more than 300,000 owner-occupied homes onto the market across England within less than a year.
“Unlocking even part of that potential supply would increase choice, enable more people to move into homes that better meet their needs and help transactions flow more freely across the market
“Looking ahead, market activity will increasingly depend on economic stability and policy certainty.
“As the Government develops its housing agenda, the industry will be looking for measures that support housing delivery, improve affordability and mobility, and give both buyers and sellers the confidence to plan for the longer term.
“While the market remains resilient, sustained growth will depend on creating the right conditions for activity across all parts of the housing market.
HOLDING STEADY
Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts, says: “The market is holding steady rather than collapsing – it feels very flat and that is likely to continue over the summer.
“With Andy Burnham now in Number 10 there is some uncertainty – buyers and lenders don’t like uncertainty, and this arrives right on top of the Middle East-driven rate volatility reversing the mortgage price war we had seen through June.
“The rental market remains genuinely undersupplied – stock at record lows and landlords continuing to exit under the Renters’ Rights Act – and while national figures show rent growth moderating, rather than the frenzied rises of 2022/23, that’s not what we’re seeing on the ground.
“It is still distressing that a property goes live for lettings and the phone rings off the hook from people needing a home. Unlike a sale, there’s no scope to bid over the asking rent under the new regulations, so instead landlords are simply asking higher figures from the outset – and people are still having to pay it.
“We’re seeing cases where landlords are securing lets £400 to £500pcm more than the previous year on a one or two-bedroom flat. The rental price is considerably more than a mortgage and will impact tenants’ ability to save.”
NOT A PRETTY PICTURE
Jonathan Hopper, CEO of Garrington Property Finders, says: “April’s data was flattered by base effects in the statistics, but these May numbers shine a truer, more unforgiving light on what’s happening in the property market.
“The picture revealed isn’t pretty in many English regions. On a monthly basis, prices fell across the Midlands and in the South West in May.
“But the sharpest falls by far were seen in London, with average prices in the capital slumping by 3.7% in the year to May, and by 1.2% in May alone.
“Several factors lie behind this slide. Firstly, the stark imbalance between supply and demand in the capital. The number of sellers far exceeds the number of serious buyers, and this has created a buyer’s market in which buyers can dictate both prices and transaction levels.
“Borrowing costs play a role too. Buyers in London and the South East typically need larger mortgages, and the spike in interest rates following the outbreak of conflict in the Gulf has limited the amount they can afford to borrow – forcing many to drive a very hard bargain on price. Under pressure sellers often have little choice but to accept low offers, and this price cutting is feeding through into the data.
“For well-funded buyers, sliding prices have gifted them the strongest negotiating hand seen in years. In London and the prime markets, realistic sellers are already repricing. With mortgage approvals softening, cash and proceedable buyers are firmly in the driving seat.
“The one caveat is that Land Registry data tells us where the market was, not where it is. These sales were agreed months ago, and sentiment has moved on since then. With a new Prime Minister and Government now in place, all eyes are Downing Street for policy steers. Clear direction over the summer would settle rumours, steady nerves and give the market the confidence it has been waiting for.”
SPOLIT FOR CHOICE
Iain McKenzie, CEO of The Guild of Property Professionals, says: “Today’s figures show that house price growth remains positive, but the pace of appreciation is cooling as the market adjusts to a more challenging economic backdrop.
“Buyers are taking longer to make decisions, are negotiating harder and are far more sensitive to price than they have been in recent years.
“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.
“While activity has softened month-on-month, it’s important to keep the wider picture in perspective.
“Transaction levels remain ahead of last year, demonstrating that there is still healthy underlying demand from buyers whose moves are driven by life events rather than market timing. Attention will now turn to the Bank of England’s next interest rate decision, which will play an important role in shaping confidence during the second half of the year.”
ONGOING UNCERTAINTY
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “It’s clearly too early to say whether the change in prime minister is likely to have a significant impact on housing market sentiment.
“One reason for uncertainty has been replaced by another. However, prospects for growth have definitely improved and need to.
“These most comprehensive of all the housing market reports, which cover purchases dependent on mortgages as well as the 40% of cash-only transactions, but are dated, show how national and international political as well as economic factors have been weighing on decision-making.
“Buyer bargaining power was strong before but fewer and slower transactions has seen it strengthen further.
“Looking forward, today’s encouraging inflation figures will help to revive confidence but we don’t expect major improvements in activity on the ground until the end of the summer holiday period at least.”
ROBUST RENTALS
And he adds: “Rental market activity has remained surprisingly robust. Solid rental levels continue to be supported by lack of supply prompted in part by landlords selling up – albeit in smaller numbers – due to tax and regulatory concerns.
“In our offices, we have noticed a fair number of existing landlords playing a wait-and-see game to see whether rents increase sufficiently to justify remaining in the sector. Demand remains solid but better-quality tenants are in shorter supply.
“Of more concern is the lack of new, younger breed or even larger scale, build to rent landlords ready to take their place.”
INTEREST RATE HOPE
Jason Tebb, President of OnTheMarket, says: “Average property values rose 2.7% in the year to May, a resilience which is all the more remarkable given everything that has hit the wider economy over the past 12 months.
“Increased stock, more choice and continued squeezed affordability are likely to keep prices in check for the foreseeable future, which is good news for first-time buyers in particular.
“Our own Property Sentiment Index shows that the gap between buyer and seller expectations is narrowing, with properties increasingly priced appropriately from the outset.
“This should help transactions progress more quickly and smoothly, which will help the overall functioning of the housing market. We have also found that greater certainty around renters’ rights is giving tenants more confidence that their next move is achievable.
“As always, much depends on which part of the country you are buying or renting in as average national figures conceal significant regional variations. Property prices contracted in London by 3.7% over the year, due to increased stock available and buyers finding it harder to raise the necessary finance to afford properties which are considerably higher than in other parts of the country.
“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.”
