UK house prices grew at their slowest rate in May 2026 for over two years, with annual increases decelerating to 2.7% as affordability concerns come to the fore, according to the latest Land Registry House Price Index. The monthly growth rate also slowed significantly, falling from 0.5% to 0.3%. This cooling in the market has pushed the average UK property price down to £270,080.
Regional variations remain a defining feature of the UK's patchwork property landscape. While England saw an annual rise of 2.3%, Wales and Scotland outperformed with growth rates of 4.2% and 4.4% respectively. Northern Ireland continues to be the standout performer, with prices surging by 7.4% annually in the first quarter of 2026. Conversely, London's average price has fallen by a stark 3.7% over the past year.
Industry experts point to a combination of factors behind the market slowdown. Elevated mortgage rates, political uncertainty, and seasonal influences like the World Cup and summer weather have all taken their toll on activity, according to Richard Donnell, Executive Director of Research at Zoopla. The firm's data shows a significant 20% year-on-year drop in buyer enquiries, with sales agreed falling by 7%. This suggests prospective buyers are taking a more cautious approach.
Affordability remains a pressing concern for first-time buyers, as highlighted by Nathan Emerson, Chief Executive of Propertymark. The upcoming Bank of England base rate decision and Ofgem's energy price cap announcement could further influence consumer confidence. Political uncertainty under Prime Minister Andy Burnham is also cited as a potential factor affecting buyer sentiment in the coming months.
Despite the slowdown, some observers believe the market may be moving towards a more balanced state. Jason Tebb, President of OnTheMarket, suggests that increased housing stock coupled with ongoing affordability pressures could help stabilise prices and benefit first-time buyers. Nick Leeming, Chairman of Jackson-Stops, echoes this sentiment, noting that buyers are exercising greater choice and sellers are increasingly recognising the importance of realistic pricing.