£798,000 £1,145,666 -5.3%
£43bn 16,993
SUMMER SLOWDOWN
The summer market has arrived early this year, as a high number of homes for sale and elevated borrowing costs leave buyers cautious and price sensitive. However, inflation has proved better than feared and an emerging US-Iran ceasefire framework, if it holds, could help ease global uncertainty and support lower mortgage rates.
A MORE REASSURING INFLATION PICTURE
The Bank of England kept interest rates at 3.75% last month, where they have been since December 2025. Inflation has so far proved better than feared, holding at 2.8% in May, though it remains above the Bank’s 2% target¹. When the Iran conflict erupted, rising inflation was seen as the key economic risk, with global supply chains in the firing line, so May’s data brings some cautious relief, although some inflationary impacts remain delayed. Forecasts point to inflation of around 3.7% by year-end, elevated, but nothing like the peaks of recent years, provided the agreement between the US and Iran holds and the Strait of Hormuz reopens fully. The improved outlook benefits interest rates too, with consensus forecasts now suggesting the Bank of England rate will remain at 3.75% for the rest of the year, contrary to earlier expectations that the base rate would need to rise². A USIran agreement could ease mortgage rates further if it holds, though uncertainty over who will succeed Prime Minister Keir Starmer, who announced his resignation, risks clouding any recovery.
BUYER DEMAND SOFTENS
Buyer demand continues to weaken as higher mortgage rates and political uncertainty weigh on confidence; a significant proportion of buyers are choosing to delay decisions in the face of affordability pressures and uncertainty around the path of interest rates. The UK GfK Consumer Confidence Index held steady at -23 in June, unchanged from May but still firmly negative³. This hesitancy is feeding through into the pipeline: mortgage approvals fell sharply in May to 56,205, down from 66,034 in April and 11% lower than a year earlier4
TRANSACTIONS HOLD UP
Transactions are showing overall resilience, with 98,450 recorded in May, 2% lower than April but up 17% year-onyear, though this annual comparison is skewed by the lower transaction levels seen last year following SDLT threshold changes5 . The longer-term picture points to volumes holding relatively steady: in the latest RICS survey, a net balance of +2% of respondents anticipate that sales volumes will pick up over the year ahead, moving into neutral territory and up from a slightly more negative reading of -6% previously6
AN EARLY START TO THE SUMMER SLOWDOWN
Slower sales are feeding through into prices, with a combination of factors, including wider economic uncertainty, the timing of the May bank holiday, an unusual heatwave, and the high number of homes on the market, appearing to bring forward the traditionally slower summer market. The average asking price fell 0.6% this month to £376,191, the sharpest June decline in fourteen years, leaving prices 0.5% below where they stood a year ago, as sellers reduce prices to tempt buyers7. In England and Wales, the average price of a prime market property is £1,145,666, having eased by 5.3% year-on-year.
Looking further ahead, expectations for prices over the year have moved marginally into positive territory, posting a net balance of +6% in May, having edged higher in each of the previous two months8 . Affordability-constrained markets such as London, the South East, and East Anglia are expected to remain broadly flat, while regions such as North West England, Scotland, and Northern Ireland are expected to see prices rise.
¹ONS, ²HM Treasury Average Consensus Forecasts, 3Gfk, 4Bank of England, 5HMRC, 6RICS, 7Rightmove, 8RICS
£550,000
£754,356 -4%
£359
£549,000
£738,429 +0.2%
£385
£588,000
£776,778 +0.2%
£387
£494,000
£639,052 +0.5%
£336
£730,000
£971,621 -3.2%
£468
£930,000
£1,304,138 -4.6%
£567
£425,000
£570,749 +1.1%
£306
£520,000
£691,233 -0.8%
£356
£539,000
£705,500 +0.1%
£341
£812,000
£1,103,321 -1.5%
£534
£1,490,000
£2,327,808 -9.5%
£1,155
Source:
Source: Dataloft by PriceHubble, Land Registry.
Dataloft by PriceHubble, Land Registry.
£279,706
£798,000
£1,145,666
£224,467 £701,000 £1,033,730
Source: Dataloft by PriceHubble, Land Registry.
£276,762
£661,000 £907,525
£436,742
£1,040,000 £1,494,179
£225,706 £662,000
£1,017,337
£292,229 £812,000 £1,165,684
Source:
Source: Dataloft by PriceHubble, Land Registry.
Dataloft by PriceHubble, Land Registry.