Annual growth slowed from a revised 3.9% in the 12 months to April 2026 to 2.7% in the 12 months to May 2026.
The 0.3% monthly rise was smaller than the 1.5% rise recorded in the same month a year earlier.
Lee Williams, national sales manager at Saffron for Intermediaries, said: “June’s figures suggest the housing market continued to show resilience despite a backdrop of economic and political transition. With Andy Burnham entering office this week [as] Prime Minister, the market will inevitably be watching how the new government approaches housing and the wider economy.”
Regional divide widens
Regional performance was uneven, with Northern England recording the strongest gains while London continued to underperform.
The North West recorded the biggest monthly price increase of any region in the UK, at 1.4%.
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The North East recorded the biggest annual price rise of any region in the UK, at 5.9%. The region also had the lowest average house price in England, at £164,000.
For annual growth, the North East and North West led all regions, while London was the only region in decline.
London recorded a monthly fall of 1.2% and an annual fall of 3.7%, the weakest performance on both measures in this report, with an average property price of £545,000.
Jonathan Hopper, CEO of Garrington Property Finders, commented on the trend in London: “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.”
Mortgaged buyers pay highest prices
By buyer type, mortgaged purchasers continued to pay the highest average prices, while first-time buyers remained at the lower end of the market.
The former paid the highest average price, at £298,000, while first-time buyers paid the lowest average price, at £244,000.
Mortgaged buyers saw the biggest annual price growth, at 2.4%, while cash buyers saw the smallest, at 2.1%.
Karen Noye, mortgage expert at Quilter, said: “Recent mortgage rate increases risk taking some momentum out of the housing market just as confidence had started to improve… Fixed mortgage pricing remains highly sensitive to swap rates and market expectations for inflation and interest rates. Even relatively modest moves can make a meaningful difference to affordability when buyers are already stretched.”
She added: “Many first-time buyers are already pushing hard against deposit requirements, monthly repayments and lender affordability assessments, so even small increases in mortgage rates can reduce borrowing power. Homes that were only just within reach may no longer be affordable, forcing some buyers to delay their plans or look at cheaper properties.”
Semi-detached homes lead property type growth
Price movements also varied by property type, with semi-detached homes recording the strongest annual growth and flats and maisonettes remaining the lowest priced category.
Semi-detached properties saw the biggest annual price increase of any property type, up 4.1% from £279,000 to £291,000.
Flats and maisonettes were the cheapest property type, averaging £217,000, down 2.2% annually.
All property types combined rose 2.3% annually from £286,000 to £292,000.
New-build prices outpace resales
New-build and existing resale properties showed sharply different trends, with new builds rising strongly while resold homes recorded annual and monthly falls.
New-build properties averaged £392,000, up 4.8% annually and 2.6% monthly.
Existing resold properties averaged £287,000.
Chris Storey, chief commercial officer at Atom Bank, commented: “Andy Burnham has promised a dramatic improvement in the number of council houses built across the country, but he will also need to oversee an improvement in the number of private developments if we are to ensure homeownership becomes more affordable and achievable.”
Looking forward to changes that await from Burnham’s government, Nick Leeming, chairperson of Jackson-Stops, commented: “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.”
