This week, the governor ruled out rate cuts despite oil prices softening, favouring a more cautious stance until there is more certainty over the direction of travel through the strait. Farage was called out over skint claims after a £4m property portfolio was uncovered. Andy Burnham promised a council house building revolution while his success rate in Manchester was found lacking in affordable housing. Prices continued to rise in the north and stagnate in the south where stock proved sticky to shift in the heat and development remained on hold. Welcome to another UK Property News Recap – 03.07.2026.
Shifting stock proves a tough sell
Rising rates and political uncertainty knock buyers’ confidence, leading many to retreat from the market until they can either seize an opportunity that is too good to miss, or conditions improve. This left sales agreed over the last 4 weeks in May 7% lower than last year, and three in five homes listed for sale since January languishing on the portal shelves. UK price inflation crept lower to 1.4% in May with affordability fanning prices in the North East and North West and Scotland by 3%. Meanwhile London, for the ninth consecutive month, continued to see prices fall -0.2% and -0.3% in the South East. Two to Three bed houses remain sought after while one bed flats have fallen out of favour with over two-thirds listed this year remaining unsold.
Variations in UK property prices afford some more space than others
The current average asking price of a home, according to Rightmove, is approximately £378,000. Depending on where you are based in the UK this could see buyers settled in a five bed house or a small studio. The post-Covid desire for more space has lingered but is more focused in areas with improved connectivity, which will provide a better life/work balance to buyers. North Lanarkshire in Scotland was identified as the area where your money would go further while London was the least. Given this, buyers are stretching search areas instead of budgets for more space.
A council house revolution?
Andy Burnham pledged to deliver the “biggest council house building programme since the post-war period”. The building programme will be overseen by Number 10 North, and seek to minimise costs by using vacant public land and bringing higher density residential development across the UK’s towns. As a country we are in dire need of more council housing. How this will be funded and achieved while borrowing costs are high will determine how successful it is.
Mortgage approvals fall in May
Market caution dampened net mortgage approvals in May – lending fell from 66,000 in April to 56,200 in May, with remortgaging down from 51,200 to 33,300 when seasonally adjusted. This was echoed in Bankstats when not seasonally adjusted.
Overseas pension fund rethinks UK property investment
Pension Funds, Aware Super and Omers of Canada – sick of the hold music through to planning and resentful for footing a remedial works bill for a development they didn’t build – have realised that investing in UK housing isn’t such a sure thing and can prove to be more costly both to their purse and their sanity. Welcome to the UK…
SME developers fail to build up
The Iran war causes further conflict for small and medium-sized home builders in the UK, as it dents any appetite for further development or investment in new sites till buyer confidence and lower rates are back in play.
The Home Builders Federation’s quarterly SME Developer Sentiment Survey found small and medium-sized home builders are retreating from the market with 94% of respondents saying market conditions are causing caution when considering new site starts while 48% weren’t entertaining any other sites for the foreseeable. With three-quarters of SME developers now holding a negative view of market conditions the chances of new homes in smaller blocks, which typically have lower service charges, are diminished. This is a sector of the market that may not scale at the same rate as the big boys but it does provide variation and utilise more sites in places where we actually want to live. Without them buyers are left with uniform boxes to pick from in sites that are yet to realise the promised amenities.
Lombard loans call time on prime house prices
The compulsion to have it now could see multiple assets lost in uncertain times. Lombard loans that were perceived by the wealthy as a way of jumping the property queue and avoiding capital gains by retaining stocks and shares has seen some forced into selling as their assets decrease in value.
Annual house price inflation rises led by northern markets
According to Nationwide’s HPI for June, annual house price growth rose 2.2% but remained flat since May. Northern Ireland’s rise continued but is starting to stretch affordability with 8.6% growth. However the rest of the UK, led by Northern Regions, also reported growth with London finally managing a step up leaving other southern regions behind. The market remains sensitive to activity in the East. If the deal falls, once again, out of bed then rates will rise, if they complete, autumn/winter could be a busy end to the year.
Developers to be held to account for collusion
Housebuilder collusion could prove costly to developers’ bottom line after “Mark McLaren, a former legal affairs manager at the consumer group Which? takes Barratt Redrow, Bellway, the Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and the Vistry Group to court.” It’s reported homeowners could be due compensation of between £3,100 and £6,200 that could dwindle further once the lawyers take their slice. This case feels more about making developers realise that they are accountable rather than the money.
Rates continue to slide
Lenders continue to shed rates in the hope of attracting attention over the summer holidays – the average two and five-year residential mortgage rate fell to 5.51% by the end of the week according to Moneyfacts.
Mulalley wins case against overseas parent company over cladding
The cladding firm that tried the UK’s default “get out of jail card” of going into administration to avoid paying out has been caught out by a landmark case, which tracked down the parent company in Germany and ordered them to pay the contractor £1.8m towards remedial costs. This ruling is long overdue and will have many running scared. About time the tables were turned.
Questions arise over Burnham’s success developing Manchester
Andy Burnham’s previous “success” in Manchester came from handing over tax payers money to developers to build skyscrapers that would appeal to predominately foreign investors who could afford the service charge. Now Labour have successfully managed to deter investment in the UK, many of these overpriced glass towers are struggling to sell without a discount while newer buildings remain empty. Manchester may look more “polished” as a result of this building boom but it has similar issues, as does the rest of the county, when it comes to affordable housing. This supposed elevation of Manchester has come at a cost to residents who now face prices 6x times higher than their earnings. On top of this, they are now displaced further out than they would have otherwise have been. So though success may look shiny, behind it remains tarnished.
Andy Burnham’s desire to build more council houses is applauded – handing over the affordable fund to achieve this, great. Is it enough? No. Where they will be and who is going to build them, over what period of time (potentially 10 years) are questions which remain unanswered. Until then, we only have more words from someone who played the system when it was easy, not when it was hard.
The Build-to-rent market grows
North American investors drive UK growth in the build- to-rent sector. Investment in Q2 hitting 2.2bn – an all time peak for the quarter according to Savills.
That concludes this Week’s UK Property News Recap – 03.07.2026. Any questions or comments do get in touch.
