UK annual house price growth picked up to 2.2% in June, from 1.7% in May, Nationwide’s house price index reveals.
However, the index shows that prices were broadly flat in month-on-month terms, after taking account of seasonal effects.
The average house price now stands at £277,484.
Northern Ireland remained the best performing region, with prices up 8.6% year on year in the second quarter of 2026.
Meanwhile, the outer South East was the weakest performing region, with 0.1% annual rise.
Nationwide chief economist Robert Gardner says: “It is not surprising that the market has softened a little in recent months, given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates. Indeed, consumer confidence and measures of housing sentiment have weakened, and mortgage approvals fell noticeably in May.”
“While geopolitical tensions remain high, the signing of a memorandum of understanding between Iran and the US helped push oil prices back towards the levels prevailing before the conflict began.”
“If the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated – a view reinforced by the fact that UK inflation has also been lower than expected in recent months.”
“In recent weeks a shift in market expectations for the future path of Bank Rate has helped to bring down the market interest rates which underpin fixed-rate mortgage pricing.”
“If maintained, these trends will help to restore household confidence and ease affordability constraints, paving the way for a recovery in housing market activity in the coming quarters, providing that domestic political uncertainty does not adversely impact sentiment.”
Also commenting, Quilter financial planner Ian Futcher states: “Market momentum has been significantly dampened in recent months as the situation in the Middle East continued to evolve.”
“The pressure it has placed on energy prices and inflation, combined with the resulting uncertainty around the path of interest rates and broader affordability challenges, has made prospective buyers much more cautious.”
“While a ceasefire has since emerged, the effects of the conflict won’t disappear overnight. Recent data already points to a cooling market, with property transactions edging lower in May and Bank of England figures showing weaker mortgage borrowing and fewer approvals for house purchases.”
“Against this backdrop, many prospective buyers are continuing to delay making any major financial commitments. Confidence remains fragile and, after a lengthy period of fluctuating mortgage rates, households are understandably reluctant to make a move until there is greater certainty over borrowing costs and the wider economic outlook.”
Meanwhile, Garrington Property Finders chief executive Jonathan Hopper adds: “The dust is settling but that doesn’t mean it’s back to business as usual. Nationwide’s data shows that at a national level, prices flatlined between May and June.”
“The regional data reveals which areas have got back into their stride and which have not.”
“Northern England, Scotland and Wales all saw their annual pace of growth improve during the last three months. The West Midlands saw the biggest turnaround in fortunes between the first and second quarters of the year, with annual price growth leaping from zero to 3.2%.”
“The North-South divide continues to grow and could be turbocharged by a Prime Minister Burnham. A huge injection of government spending into the north could create a Burnham bounce that accelerates northern price growth further.”