UK house prices were effectively unchanged in July as affordability pressures and renewed uncertainty around mortgage rates continued to define the market, the latest Lloyds house price index (HPI) showed.

The average property price stood at £299,253, a fall of just £143 over the month following a 0.2% increase in June. Annual house price growth slowed to just 0.1%, the weakest rate since November 2023.

Prices have remained within a narrow range for almost two years and are only 0.5% higher than in November 2024, Lloyds noted, reaffirming once again the lack of sustained momentum in the market.

Amanda Bryden, head of mortgages at Lloyds, said: "Average house prices have remained relatively stable for almost two years. That trend has persisted even as buyers and sellers have faced a more uncertain economic backdrop this year.

"Affordability remains a challenge for many would-be buyers and, following recent events in the Middle East, mortgage rates have edged higher again after easing earlier in the summer."

Regional differences remained pronounced. Northern Ireland continued to be the UK’s strongest-performing market, with annual house price growth of 7.4% taking the average property price to £231,131.

Scotland followed with annual growth of 3.6%, lifting the average to £223,246, while Wales recorded a 1.6% increase to £231,458.

Within England, the strongest performance remained concentrated in the North. Prices in the North East rose 2.8% over the year to £182,488, while the North West recorded growth of 2.1% to £247,836.

Southern England continued to underperform. Average prices in the South East fell 2.0% year-on-year to £381,146, while Greater London recorded a 1.3% decline to £533,930.

Bryden added that sensitivity to borrowing costs is reflected in the latest industry data, which show a modest increase in both mortgage approvals and completed transactions in June, following a bigger dip in May.

"While housing demand remains broadly steady, activity continues to respond quickly to changes in mortgage rates," Bryden said. “Looking ahead, we expect market activity and house prices to remain relatively stable over the remainder of the year. Developments will be shaped by both how mortgage rates respond to the outlook for inflation and wider household confidence.”

Commenting on today's figures, Adam French, head of consumer finance at Moneyfacts, said: “Higher rates are slamming the brakes on what buyers can afford to borrow which has caused house price growth to stall."

Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, argued that the 0.1% annual increase provided a clearer indication of the market’s underlying direction than the marginal monthly movement

Nathan Emerson, CEO of Propertymark, concluded: "There is no denying that 2026 has presented affordability challenges for both existing homeowners and first-time buyers. With interest rates remaining steady and inflation unexpectedly falling last month, conditions may be improving to better support greater buyer confidence as the year progresses.

"However, lower mortgage applications and reduced lending over the previous quarter are likely to continue influencing market activity in the months ahead. Economic recovery also has the potential to vary by region, while changing political priorities could shape housing policy differently across individual nations across the UK too."

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