UK Annual House Price Growth Slows to 1.8% in July, Nationwide Reports
Key Takeaways
- •UK house prices increased 0.1% month-on-month in July 2026, matching forecasts, while the average property value reached £277,542.
- •Annual house price growth decelerated to 1.8% from 2.2% previously, coming in slightly below the 1.9% market expectation.
- •Elevated borrowing costs and volatile mortgage rates tied to Bank of England policy expectations continue to suppress buyer demand.
- •Nationwide cited geopolitical tensions between Iran and the US as a factor pushing energy prices and market interest rates higher in recent weeks.
- •Consumer price inflation declined further in June and easing wage growth may give the Monetary Policy Committee more flexibility on future rate decisions.
UK house prices rose modestly in July 2026, with annual growth decelerating from the previous month, according to the latest data from Nationwide Building Society.
Key Figures:
- Month-on-month: +0.1% (matching the +0.1% forecast; prior reading was 0.0%)
- Year-on-year: +1.8% (slightly below the +1.9% expected; down from +2.2% previously)
- Average UK house price: £277,542
The monthly estimate showed a marginal increase, while annual growth slowed further to 1.8%. The deceleration from 2.2% in the prior reading underscores how elevated borrowing costs continue to weigh on buyer demand, with mortgage rates sensitive to shifts in financial market expectations for the Bank of England's policy path. Overall, the market exhibits some softness, though this is consistent with the broader economic uncertainty that has characterized recent months, including geopolitical tensions in the Middle East and domestic political developments in the UK.
Despite the headwinds, the housing market has demonstrated resilience, with prices remaining above levels recorded during the same period a year earlier.
Nationwide provided the following assessment:
"Market activity and house prices have remained soft in recent months, in part reflecting the uncertain economic backdrop. Geopolitical tensions remain high, with the conflict between Iran and the US again exerting upward pressure on energy prices and market interest rates in recent weeks. Financial market expectations for the future path of Bank Rate have been volatile, reflecting shifting views about the inflationary implications of events at home and abroad.
Despite the ongoing risks from the latest energy price shock, the Monetary Policy Committee can take some comfort from the fact that consumer price inflation declined further in June. Signs that wage growth has continued to ease gives policymakers more breathing space to assess the extent to which tighter policy is necessary to ensure inflation returns to target."
Nationwide Building Society is one of the UK's largest mortgage lenders and its monthly house price index is closely watched as a barometer of British housing market conditions. The Bank of England's Monetary Policy Committee sets the Bank Rate, which directly influences mortgage borrowing costs across the country.
Source: ForexLive / InvestingLive