This was the highest UK house price annual inflation rate since March 2025, before stamp duty land tax (SDLT) changes came into effect in April last year.
All nations experienced annual increases in house prices – with Q2 figures not yet reported for Northern Ireland. Of the other three nations, England saw the largest increase of 3.9% to £291,445.
Annual prices rose by 2.8% in Scotland to £191,927, while there was a 3.5% increase in Wales to £212,489.
England reported a modest monthly increase of 0.6% relative to Scotland’s monthly increase of 2.7%.
Wales was the only exception and experienced a 0.3% decrease in house prices.
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Tomer Aboody, director of MT Finance, said the overall annual increase in property values is in fact “all the more surprising given tough market conditions, but reflects softer values a year ago following the end of the stamp duty holiday.”
Furthermore, he noted “the reality is now that buyers are more cautious and not prepared to pay over the odds, particularly when they have so much choice.”
Prices across England rise
All regions across England experienced an annual increase except for London, which faced a 2.1% fall to £552,655, but experienced the highest monthly increase of 1.9%.
The North East experienced the highest price inflation of 9.9% to £163,190, despite experiencing an average monthly price increase of 0.7%.
The North West and Yorkshire and the Humber followed with a 7.2% increase in prices, with monthly increases of 0.7% and 0.3% respectively.
Ian Futcher, financial planner at Quilter, commented on how affordability was pushing figures higher.
Futcher said: “Once [mortgage] rates start to fall, demand can return quickly and prices can pick up.
“This means the goalposts can move just as buyers feel they are getting closer.”
Terraced house values soar
Terraced house prices increased significantly by 5.8% to £228,757.
Flats and maisonettes saw restrained growth of 0.3% to £270,000.
This was a notable change to March, when terraced houses experienced muted growth versus flats and maisonette values, which dropped substantially by 5.35%.
New-build homes experienced an annual increase in house prices by 6.5% to £362,342, recording a monthly increase of 6.4%. This was markedly higher than existing resold properties that experienced price inflation of 1.2% to £264,382, with a subtle monthly increase of 0.1%.
