What’s happening with UK house prices? Latest property forecasts for 2026
With mortgage rates creeping back up and ongoing market volatility, can we expect house prices to slide?
The housing market can’t seem to catch a break in 2026 as hopes for high house price growth have been tempered by ongoing tensions in the Middle East.
Lenders and experts were optimistic about property prices at the start of the year with mortgage rates falling, but this positivity has diminished as the conflict in the Middle East persists.
The Bank of England has held interest rates at 3.75% all year so far, mindful of the war’s impact on inflation.
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Against that backdrop, borrowing money for a house is unlikely to get cheaper any time soon with mortgage rates from most major banks now far higher than in January 2026, before the war in Iran began.
Additionally, homes are taking longer to sell, which is in part blamed on low demand but also overvalued asking prices.
So, how much can you now expect to pay for a house? We look at the latest data from the major house price indices, including Halifax, Nationwide and the Office for National Statistics (ONS) and Zoopla, as well as Rightmove for asking prices.
What is the current average house price in the UK?
While each house price index (HPI) report varies, currently the average house price sits roughly between £268,000 and £300,000.
That said, these are UK average prices, and prices can vary dramatically depending on the region and methodology of each HPI.
HM Land Registry UK House Price Index
The most authoritative house price index is HM Land Registry, as its data includes cash purchases as well as homes financed through a mortgage. Its data is published on a six-week time lag, making it more retrospective than other house price indices.
The latest Land Registry data, for April 2026, shows the average UK house price is £270,000.
According to the data, house prices rose by 0.7% month-on-month and by 3.8% on an annual basis – a notable increase on the flat prices over the 12 months to March.
But the ONS pointed out the higher increase might be down to a base effect; while house prices rose moderately between March and April 2026, during the same period a year ago, they showed a sharp decrease due to stamp duty changes that took effect in April 2025.
The average house price in England increased by 3.9% to £291,000 in the 12 months to April 2026. In Wales and Scotland the comparable figures were a 3.5% increase to £212,000 and 2.8% increase to £192,000 respectively.
House prices in London continue to slide, falling by 2.1% between April 2025 and April 2026, from £565,000 to £553,000.
Nationwide House Price Index
The most recent Nationwide data shows house price growth has slowed annually for the second month in a row.
House prices rose by 1.7% annually in May, down from 3% in April. After taking account of seasonal effects, Nationwide said prices dropped by 0.6% month-on-month.
Nationwide puts the average UK house price at £278,024 as of the end of May.
Robert Gardner, chief economist at Nationwide, said some momentum has been lost in the market due to the Iran conflict but he insisted it was proving resilient due to strong household finances and low debt relative to income.
He added: “While market interest rates have risen in recent months, the impact on affordability has so far been modest. Indeed, swap rates, which underpin fixed‑rate mortgage pricing, remain well below the highs reached in 2023 and are broadly in line with levels prevailing in 2024, implying only a partial reversal of earlier gains.
“This provides some confidence that, if the latest shock passes relatively quickly, and energy prices normalise in the quarters ahead, any near-term softening in the housing market will also prove short-lived.”
Halifax House Price Index
The latest Halifax HPI shows the average UK house price maintained its monthly 0.1% decline between April and May to £298,806. The annual growth rate edged up slightly, from 0.4% in April to 0.5% in May.
Analysis by Halifax suggests the drop in house prices was a result of the higher borrowing costs and lower consumer confidence caused by the Iran war.
Amanda Bryden, head of mortgages at the lender, said: “Property price trends continue to reflect the uncertainty linked to developments in the Middle East. Despite recent cuts to mortgage rates, higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers and temper demand.”
It is the second consecutive monthly drop in house prices reported by the lender, coming after a 0.5% fall between February and March.
Rightmove House Price Index
Unlike Nationwide and Halifax’s HPIs, which are based on the building society and bank’s valuations at the mortgage-approval stage, Rightmove’s HPI is based on asking prices.
Rightmove found asking prices fell by 0.6% in the month to June, taking the average asking price to £376,191 – the biggest June price drop in 14 years.
Rightmove said despite cost pressures, the market was holding up relatively well, with sales agreed down 4% compared with May 2025, but up 2% compared to the same month in 2024.
Zoopla House Price Index
The Zoopla house price index uses sold prices, mortgage valuations and data for agreed sales to calculate house prices for any given month.
According to Zoopla’s latest data, the average house price in the UK is £271,900 (as of April 2026), up fractionally from £271,700 in March.
How is the Iran conflict affecting confidence in the market?
As well as the five main HPIs released on a regular basis, the Royal Institution of Chartered Surveyors (RICS) also publishes a monthly Residential Market Survey.
The report generates net balance scores between -100 and +100 in response to a series of questions put to its members (estate agents and surveyors) about how the housing market has changed.
RICS reports at the start of 2026 had suggested the housing market was showing positive signs, but now members are warning tensions in the Gulf are weighing down on the near-term outlook.
New buyer enquiries continue their negative trend, with the May net balance remaining at -34%. RICS said although a weak figure, it was the first reading since January that had not fallen into further negative territory, potentially indicating a more stable picture emerging.
On agreed sales, RICS members reported a net balance score of -37%, down from -36% in March. While showing further declining sales, the pace at which these numbers are falling appears to be slowing, again suggesting a period of better stability.
Will house prices rise in 2026 and beyond?
At the start of the year, major lenders and estate agents were forecasting house prices to rise by up to 3% in 2026.
Estate agency Hamptons expected property values to grow by 2.5% by Q4, while Halifax forecasted they would edge up by between 1% and 3%.
However, the ripple effects of tensions in the Middle East have prompted some economists and analysts to review their forecasts for the year.
Economists at Pantheon Macroeconomics have adjusted their predictions for house price growth for 2026 from 3% to 1%.
Meanwhile, housing analysts polled by Reuters news agency in May and June forecasted property price growth of 1.8% in 2026, down from 2.5% in March.
Estate agency and property brand Savills is now forecasting a 2% drop this year, while Knight Frank was expecting UK house prices to grow by just 1.5% in 2026 but more recently has suggested there will be more “downward pressure.”
How have mortgage interest rate changes impacted buyer affordability in the UK?
At the start of the year, many analysts hoped falling mortgage rates would help more people onto the property ladder.
Savills predicted the number of people buying homes between 2025 and 2030 will be boosted by falling mortgage rates while more relaxed affordability tests from lenders could boost transaction volumes.
But with mortgage rates rising to well above 5% on average since the outbreak of the Iran war in February, this could impact demand.
Data firm Moneyfacts says the average two-year fixed rate residential mortgage has increased to 5.73%, up from 4.83% at the beginning of March.
