The annual growth rate is down from the 1.5% recorded in June.
However, the average house price for England was £293,000 in July 2026, up by 1.1% from a year earlier.
Overall, house price annual inflation has slowed for the third consecutive month in England.
This has been attributed to a sharp slowing in the annual rate for the South West, with London and the West Midlands also contributing to the slowdown.
Jon Cooper, director of mortgages at Aldermore, said: “For prospective buyers, slower house price growth may be welcome, but it doesn’t automatically make buying a home more affordable.
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“Building a deposit, managing monthly mortgage payments and balancing wider household costs remain significant considerations, particularly for those trying to take their first step onto the housing ladder.”
He added: “A well-functioning housing market needs people to feel confident about making long-term decisions”.
London reaches almost full year of decline
The lowest annual percentage change in house price inflation was in London, where prices decreased by 3.3% to £550,000 in the 12 months to July 2026, down from an annual fall of 3.1% in June 2026.
This was the 11th consecutive month in which there has been an annual fall in house prices in London. July’s reading was the lowest annual rate for London since January 2024.
Jonathan Hopper, CEO of Garrington Property Finders, said London’s “fleeting moment in the sun is over,” after experiencing a summer surge.
Hopper continued: “After months of correction, it appears that London prices are now bumping along the seabed rather than sinking.”
The North East was the English region with the highest house price inflation, growing 4.9% to £167,000 in the 12 months to July 2026. This was up from 4% in the 12 months to June 2026.
The average house price for Wales was £215,000 in July, up by 2.6% from a year earlier.
The average house price for Scotland was up by 2.3% annually to £196,000 in July.
House prices resist ‘stubborn’ inflation
Ryan Etchells, chief commercial officer at Together, commented: “A consecutive small monthly growth in house prices in July shows a market struggling for momentum through the traditionally quieter summer months.
“Encouragingly, the headwinds of stubborn inflation and increasing mortgage rates have so far failed to fully snuff out growth.”
Tomer Aboody, founding director of specialist lender MT Finance, commented: “With inflation rising and the economy slowing, it is no surprise we are seeing little growth in the property market, which is usually the staple of the UK economy.”
Aboody claimed that with “little encouragement from a tax-hungry government”, confidence was lacking among buyers and sellers alike.
“That said, we are still seeing growth overall, while the reduction in values in some parts of the country is mainly due to a much higher starting point,” he added.
