Regional differences remain but London prices may be bottoming out

House price growth continues to struggle while rents continue to show significant growth, according to the latest figures from the Office for National Statistics (ONS).

Price growth has weakened, with average UK house prices increasing by 2.0% to £272,000 in the 12 months to June 2026, down from 3.0% in the 12 months to May 2026, according to the latest ONS House Price Index figures. On a monthly basis they grew only 0.1% between May and June 2026, compared with a 1% increase in the same period last year.

The ONS said the sharp slowdown in UK house price annual inflation was because price growth has been weaker this summer than it was last year in the months following the April 2025 Stamp Duty Land Tax.

Regionally, the figures continue to vary widely, especially between London and the north. However, the situation in the capital might finally be improving for would-be buyers, according to Jonathan Hopper, CEO of Garrington Property Finders. Average prices in London fell by 2.5% in the 12 months to June 2026, compared to a fall of 3.1% in the 12 months to May 2026.

Have prices bottomed out?

Hopper said: “London’s long and painful correction is finally easing. Property values in the capital have fallen on an annual basis for 10 months in a row, but there are increasing signs that prices have finally bottomed out.

“On a monthly basis, prices surged back to growth in June. The average London property jumped in value by £9,000 over the month, and while one month of Land Registry data does not a summer make, we may have reached a tipping point as tactical buyers who’d been waiting for the right moment to strike return to the London market,” he said.

Rental growth rate up

On the lettings side, average UK monthly private rent increased by 3.7%, to £1,393, in the 12 months to July 2026 (provisional estimate); this annual growth rate is up from 3.3% in the 12 months to June 2026.

Average rents increased to £1,451 (3.8%) in England, £843 (4.5%) in Wales, and £1,016 (1.7%) in Scotland, in the 12 months to July 2026.

In Northern Ireland, average rents increased to £875 (2.3%), in the 12 months to May 2026.

In England, private rent annual inflation was highest in the North East (6.3%), and lowest in the South East (2.9%), in the 12 months to July 2026.

Tom Bill, head of UK residential research at Knight Frank said: “Rents are being pushed higher as the unintended consequences of the Renters’ Rights Act play out.

“Some landlords have left the sector, which has reduced supply, while others have increased asking rents to reflect the additional financial risks they face.

“The consequences may be unintended, but they were not unexpected, and a policy designed to tip the balance of power towards tenants is adding to the financial pressures they already endure.”