Elevated mortgage rates and political uncertainty have driven a sharper-than-usual summer slowdown, according to Zoopla’s House Price Index (HPI).
The average UK home was valued at £272,800, up £3,400 over the past year.
North leads on price growth
Annual house price growth strengthened in the North West from 3.2% to 3.5%, with the average home valued at £210,000.
The North East and Scotland both recorded annual growth of 3.1%, up from 2.6% and 2.8% respectively, with average house prices of £151,500 and £175,800.
£2.5m paid to help broker clients benefit from greener homes
Sponsored by Halifax Intermediaries
House price growth accelerated in the West Midlands to 2.1%, up from 1.8% a year earlier, with the average property now worth £238,500. The region recorded one of the stronger performances across England, with values rising by £5,000 over the last 12 months.
East Midlands slowed to 1.2% from 1.7% a year ago. However, average house prices still increased by £2,830 year-on-year to £233,900.
Meanwhile, London moved from 0.7% annual growth last year to a 0.6% decline in June 2026, with the average home worth £527,100 after losing £3,270 in value.
The South East also experienced a shift from 0.7% growth to a 0.4% decline, leaving the average property valued at £384,300.
The South West saw growth slow from 0.6% to flat year-on-year, with the average house price at £310,800. The East of England slowed from 1.3% to 0.4% and reported an average price of £338,800.
Northern Ireland showed the strongest annual growth at 5.1%. However, this was down from 7.5% a year ago, with the average property now worth £197,200.
Hotspots and cold spots
Zoopla identified Warrington, Hull and Dundee as housing market hotspots, with sales agreed remaining positive or increasing and house price growth outperforming local trends.
In Warrington, annual house price growth was 3% compared with 3.4% a year earlier, while Hull’s growth increased from 0.8% to 2.2%. Dundee recorded growth of 2.4%, up from 2.2% last year.
Bath, Oxford and Harrow were highlighted as cold spots, where sales activity weakened and house price growth deteriorated.
Liverpool experienced the largest annual change in house price by 4.2% to £171,000. Other English regions that followed were Newcastle by 3.2% to £164,700 and Manchester by 2.7% to £239,900.
Cambridge reported a decrease by 1.2%, after a growth of 1.1% last year, with the average house price at £463,700. Similarly, Bournemouth was the only region to report a consecutive year of decline – from minus 0.5% to minus 2.1% this year, with the average price sitting at £315,600.
Richard Donnell, executive director at Zoopla, said: “This summer has seen a sharper slowdown than usual, with higher mortgage rates and political uncertainty both weighing on buyer confidence. But it’s not all one-way traffic; sales are still getting done, house prices are still rising in most of the country, and buyers have more room to negotiate than they’ve had in some time.
“Conditions can vary sharply from place to place, with almost three-quarters of local markets have seen sales fall over the past three months, but a quarter are bucking that trend entirely. Sellers should speak to a local agent who knows what’s actually happening on their own patch, rather than relying on the national picture.
“For anyone who doesn’t need to move, it’s entirely reasonable to wait and see how things settle. But for those with a genuine need to sell, our data shows September is when the market typically turns, and pricing to meet buyers now is what tends to get deals done, rather than waiting to see what autumn brings.”
Sales dip over the summer
Sales agreed were 9% lower year-on-year over the four weeks to 19 July, making it the weakest reading of 2026 so far.
The North East was the only region to record sales growth, with transactions agreed up 4% compared to a year earlier.
Zoopla said the slowdown was due to higher mortgage rates and political uncertainty. The average mortgage rate rose from around 4.65% in June to 4.75% in July.
It added that mortgage rate increases since January have added around £125 per month – or £1,500 annually – to repayments on a typical mortgage.
Notably, buyer choice increased across much of the country, with the number of homes available for sale rising year-on-year in eight of the UK’s 11 regions.
September ‘bounce’ on the cards
Zoopla said the market typically sees a recovery in sales activity in September after the summer slowdown, after assessing behaviour from the last three autumn as sellers adjust asking prices to better reflect buyer demand.
It pointed out that homes with an asking price reduction of 5% or more have historically peaked in September, helping to drive a seasonal pick-up in transactions.
The September ‘bounce’ depends on mortgage rates holding steady rather than rising further. The firm added that a further rise would likely delay any recovery in buyer confidence, rather than support it.
