On an annual basis, prices fell by 0.4% – the first year-on-year decrease recorded since November 2023.
Jonathan Hopper, CEO of Garrington Property Finders, commented: “A summer slowdown is normal, a slide is not. Summer 2026 has seen both.”
He added: “Today’s weak data is likely to further suppress buyer activity as the prospect of further price falls won’t encourage buyers to rush to do a deal at anything other than a fair price this autumn. The summer lull is unlikely to turn into a September surge.”
Northern regions make strongest gains
In England, the North East recorded annual growth of 2.7% to £184,370. The North West followed with an increase of 2% to prices, taking the average property price to £248,675.
£2.5m paid to help broker clients benefit from greener homes
Sponsored by Halifax Intermediaries
Outperforming England, Northern Ireland recorded the strongest annual growth, with prices up 6.9% year-on-year to £231,245.
Scotland came in second, with a 3.5% growth in property prices to £223,437.
With average prices falling 1.6% year-on-year, the South East experienced the largest regional decline. London followed with a 1.5% drop, while the South West and East of England each recorded falls of 1.2%, leaving average values at £298,807 and £331,410 respectively.
Jeremy Leaf, North London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chair, said: “We are seeing a bit of a stand-off between buyers who are nervous about making offers while worried about the effects of inflation on mortgage costs and sellers who believe they have reduced as much as they can.
“Therefore, prices overall in the fewer properties [that] are changing hands are not only softening, but sales are taking longer.”
Nathan Emerson, CEO of Propertymark, added: “Across the year so far, many people have, in some way, felt the direct impacts of ongoing global unease on their monthly outgoings. We have witnessed many household costs continue to rise, while consumer affordability regarding housing has prompted a wave of caution, subsequently tapping the brakes on house price growth currently.
“As we head into the autumn months, the upcoming Autumn Budget may well help determine the plans of many aspiring buyers and sellers for their next house move, alongside the upcoming inflation figures and interest rate announcement in the middle of the month.
“Following what has, in part, been an uneven year, it is hoped that the housing market will regain a more stable footing as the year progresses.”
Commenting on the political backdrop, Tomer Aboody, founding director of MT Finance, said: “A fall in average house prices in August comes as no surprise, with the new prime minister already indicating further and harsher taxes to come for both homeowners and landlords. Trying to squeeze every house owner further isn’t the way to encourage the economy or help it flourish.
“How well the year finishes for the housing market will depend on whether or not Andy Burnham is advised against further punitive taxes.”
