This week, it became evident that the UK property market is entering a transitional phase, with house price growth slowing, mortgage approvals rising ( albeit temporarily according to lenders), and buyer sentiment split between caution and opportunity. The summer market is always a little sticky and this year won’t disappoint. The ‘Governor’ alluded to gradual rate cuts which the government is “banking” on. Praying it will be enough to galvanise investors and buyers when their “Out of office” is on. Welcome to another UK Property News Recap – 04.07.2026.
More sales as supply increases
A combination of economic and global uncertainty mixed with an increase in stock levels, led to UK house price inflation slowing to 1.4% according to Zoopla’s latest HPI. Despite this, sales rose as buyers diverged into two categories: those struggling with affordability or watching and waiting for some stability and those making hay before more buyers opt in with each base cut or are sick of waiting for normality after “passing” on the last three years.
Homes above £500k are proving harder to shift than those under. Due to this, incorrect pricing can lead to a lasting and costly first impression.
Construction builds on future confidence
The Arcadis Summer 2025 Market View report for the construction industry is quietly optimistic for a slow and steady recovery across the sector if rates continue to reduce down further. The main drivers are social infrastructure and the mobility sector, with connectivity to new lower rise developments and amenities taking the lead.
Mortgage approvals move forward
The Bank of England’s Money and Credit Report showed that after a post-stamp duty lull, net mortgage approvals for house purchases picked up, increasing by 2,400 to 63,000 in May when seasonally adjusted. Approvals for remortgaging also rose, up 6,200 to 41,500 in May, which is the largest increase since February 2024. When not seasonally adjusted both house purchases and renewals increased but house purchases were down on last year’s efforts.
House prices melt in June
According to Nationwide’s latest HPI, the house price comeback in May proved short lived as house prices melted in June by -0.8% to £271,619. Most regions annually and over the quarter saw growth slow but Northern Ireland remained the strongest performer and East Anglia the weakest. Terraced house prices have seen the largest increase: average prices up 3.6% year on year, while flats saw growth nosedive from 2.3% to 0.3% in the last quarter alone. Moving forward, there remains optimism around the autumn market, rate and economic disasters permitting!
Andrew Bailey signals rates to fall slowly over the coming months
Cuts were already anticipated for later in the year but whether the first chop will fall in August or September is reliant on persistent inflationary pressures, such as average wage outpacing inflation and higher energy prices softening. For anyone looking to make a move or remortgage this will provide some relief.
UK home shortfall
Research from the Centre for Policy Studies showed that there were just 446 homes for every 1,000 people in Britain. The European average of 542 homes for every 1,000 people, they predict, wouldn’t be achievable until 2115.
If the UK resolved the housing shortage, they calculated prices would fall by around £800 per square metre which would be a costly build. You can incentivise buyers but you can’t force builders to build, hence the status quo.
The UK’s most expensive and cheapest seaside locations
Rightmove revealed the UK’s most expensive and cheapest seaside locations. Unsurprisingly, those situated where the weather is warmer came out top! Sandbanks topped the leader board, prices averaging £1,282,565 with Saltcoats in Ayrshire coming in last place. As a consolation prize, Ayrshire did, however, make first place for the most affordable seaside location at £122,208.
One brick at a time
Deliveries of bricks in May 2025 were 10.6% higher than in April & 15.3% higher than a year ago according to the Department for Business & Trade, signalling a move to build on housing numbers.
The Social and Affordable Homes Programme
The Ministry of Housing, Communities and Local Government makes affordable homes more “social.” The aim: create 300,000 social and affordable homes through the new £39bn programme, now named the Social and Affordable Homes Programme, with at least 60% for social rent .
Rates fall further
Another week and yet further rate adjustments. The AVERAGE UK mortgage rate saw a 0.01 percentage point adjustment downwards, making the average mortgage rate now 5.09% according to Moneyfacts. As individual lenders take more decisive action, keen to drum up business before schools break for the summer, Nationwide Building Society trimmed their rate offerings by up to 0.20% and Santander by as much as 0.16%.
Rathbones try to drum up new business
Rathbones, the investment and wealth management firm, claimed the age of property investment in second homes and buy-to-let properties is over. They reported that since 2016, when Osborne began his campaign to disincentivise landlords with an additional surcharge and fazing out mortgage relief, investors would have seen more bang for their buck if they’d put their money in stocks and shares. That said, retrospective investment ideals aren’t always a reality and a lot would greatly depend, for those in property, on the asset, debt level and if you “flipped” around. Either way, today the tax haul far outweighs what it once did so for those who are over-leveraged, or reaped only marginal gains: getting out makes sense. For others, who can still turn a generous profit, they will persist.
Future lending takes a summer vacation
Continued uncertainty will dry up future lending demand over the summer holidays.
In the Bank of England’s Credit and Conditions survey, demand for secured lending for house purchases and remortgaging was reported to have increased in Q2, and was expected to further growth in the latter but decrease for the former in Q3.
Cities get a first time buyer boost
First-time buyers in the UK, in need of an easy commute and a decent wage, look to cities when first climbing the ladder. Demand to move to Great Britain’s 50 largest cities (excluding London) increased by 16% on average over the last ten years. Dundee saw the most significant increase in demand while London’s fortunes slid, demand down 7%, as affordability blocked entry. Meanwhile, coastal spots flatlined after a brief flurry of activity during the pandemic but remained on the bucket list for later on in life.
Right to Buy discounts slashed
Angela Rayner reserves newly built council homes for the government for the next 35 years. After which tenants will have the same right to buy (and renovate) as tenants do with existing stock, but only after a residency of 10 years. Discounts will also be cut from 35% to five to 15%, depending on length of tenancy.
Domestic buyers make the most of international losses
Well funded, domestic UK buyers have an opportunity to upgrade their postcode in prime central London for a fraction of the price. As those migrating east are having to accept a loss on their property to save their millions.
Lender withdraws from prize draw
As a sticky summer of lending kicks in Lender Halifax feels less inclined to give away.
Halifax announced it was scrapping its monthly prize draw for mortgages and savers which offered one customer per month the chance to have their mortgage, worth up to £300,000, paid off in full. The last draw will be in September 2025.
This concludes this week’s UK Property News Recap – 04.07.2026. Any questions or comments do get in touch.
