UK Property Market Update — July 2026: Prices Firm as Mortgage Rates Ease

The UK housing market entered July 2026 with two data points pulling in opposite directions. Nationwide's June 2026 House Price Index reported that annual house price growth picked up to 2.2%, its firmest reading in months, while Rightmove and Halifax both flagged the biggest June asking-price fall in fourteen years. For homebuyers, sellers, landlords and surveyors, the story this month is one of a stabilising sold market meeting a nervous asking-price market, with mortgage rates edging lower for the first time since spring.

Mortgage rates fall as a rates war builds

The most tangible relief for buyers this month came from the lender side. According to broker data reported across the market, the average two-year fixed rate slipped to 5.07% in July 2026, down from 5.18% in June. That is worth roughly £30 a month on an average mortgage payment — modest, but the direction of travel matters more than the number.

Behind the move is a shift in expectations for the Bank of England base rate, which the Monetary Policy Committee held at 3.75% at its most recent meeting. Markets are no longer pricing in further cuts for the remainder of 2026, but they have pulled back their expectation of hikes as well. Nationwide's chief economist attributed the softer mortgage pricing to that repricing of the base-rate path, which underpins fixed-rate swap markets.

Nationwide vs Rightmove: why the numbers diverge

Two of the market's most-watched trackers told very different stories in June.

• Nationwide House Price Index (mortgage-approval data): average UK house price of £277,484 in June 2026, broadly flat month-on-month after seasonal adjustment, with annual growth accelerating to 2.2% from 1.7% in May.
• Rightmove / Halifax (asking-price data): average asking price down 0.6% (-£2,113) to £376,191 in June — the largest June drop in fourteen years — with sales agreed running around 7% below the same point last year and buyer enquiries down about 15%.

These are not contradictory. Nationwide captures prices agreed at mortgage-approval stage; Rightmove and Halifax capture what sellers hoped to achieve when they listed. The gap in June suggests sellers are quietly meeting the market where offers are actually being made, rather than a fresh leg down in achieved prices.

Regional picture: Northern Ireland leads, Outer South East lags

Regional Q2 2026 data from Nationwide shows Northern Ireland extending its lead as the strongest UK region, with prices up 8.6% year-on-year. At the other end, the Outer South East — traditionally the weakest post-pandemic performer — recorded annual growth of just 0.1%. London and the South East continue to underperform the UK average, with commuter belt affordability constraints outweighing wage growth even as mortgage rates ease.

Renters' Rights Act: two months in, what surveyors are seeing

The Renters' Rights Act 2025 commenced on 1 May 2026, and July's market activity is the first meaningful window into how the private rented sector is adjusting.

• End of Section 21. Landlords can no longer serve new Section 21 no-fault eviction notices; all possession claims must proceed under a Section 8 ground.
• Information Sheet requirement. Landlords with tenancies that were assured shorthold tenancies on 1 May 2026 were required to send the government Information Sheet to their tenants by 31 May 2026. Missing the deadline can attract a civil penalty of up to £7,000 per property.
• Rent increases. Rents can now only be raised once every twelve months, and bidding wars are banned.
• PRS Database. The forthcoming Private Rented Sector Database begins its phased regional rollout later in 2026, with landlord registration and compliance data becoming mandatory before the Landlord Ombudsman sign-up requirement in 2028.

For surveyors, the practical impact this summer is a steady uplift in EPC-related instructions and inventory work as portfolio landlords audit compliance ahead of PRS Database launch. Pre-purchase survey demand in the buy-to-let segment remains softer than owner-occupier work.

Outlook for the rest of 2026

With the base rate expected to stay at 3.75% for the rest of the year and mortgage rates drifting lower, the second half of 2026 is likely to hinge on sentiment rather than affordability shocks. Rightmove's weaker enquiry data hints that buyers are still cautious, but the Nationwide print suggests that where deals are being done, prices are firming rather than falling. Regional divergence — Northern Ireland and parts of the North running hot, the Outer South East cool — is expected to widen before it narrows.

Frequently asked questions

Are UK house prices going up or down in July 2026?

Both, depending on which index you use. Nationwide's approvals-based index shows annual growth accelerating to 2.2% in June 2026, while Rightmove's asking-price data shows June sellers cutting prices by 0.6% — the largest June cut in fourteen years. Sold prices are firmer than headline asking prices.

What is the average UK mortgage rate right now?

The average two-year fixed rate stood at around 5.07% in July 2026, down from 5.18% in June, saving borrowers roughly £30 a month on typical loans. Rates on longer fixes have moved by less.

Is the Bank of England expected to cut interest rates again in 2026?

Markets are pricing the base rate to remain at 3.75% for the remainder of 2026, though further cuts in early 2027 remain possible if inflation cools faster than the MPC forecasts.

Do landlords still need to serve Section 21 notices?

No. Since the Renters' Rights Act commenced on 1 May 2026, Section 21 no-fault evictions are no longer available. Landlords must rely on Section 8 grounds. Landlords with pre-existing assured shorthold tenancies were also required to send tenants the government Information Sheet by 31 May 2026.

Sources: Nationwide House Price Index (June 2026); Rightmove House Price Index; Halifax; Bank of England Monetary Policy Committee; NRLA; gov.uk — Renters' Rights Act 2025 Information Sheet.