HOUSE prices are up 2.7% in one year as property experts warn the market is “stuck in slow-moving traffic” with “households thinking twice before moving”.
Average UK house price annual inflation was 2.7% in the 12 months to May 2026. This was down from a revised 3.9% in the 12 months to April 2026, the UK House Price Index for May showed.
The slowing in the UK annual rate was driven by a base effect from the aftermath of last year’s Stamp Duty Land Tax (SDLT) changes in England and Northern Ireland on 1 April 2025, similar to SDLT effects seen previously.
The annual rate slowed in May 2026 because average UK house prices rose by a smaller amount (0.3%) between April and May 2026 than in the same period a year ago (1.5%).
The average UK house price was £271,000 in May 2026, which is £7,000 higher than 12 months ago. Average house prices in the 12 months to May 2026 increased in England to £292,000 (2.3%), increased in Wales to £215,000 (4.2%) and increased in Scotland to £196,000 (4.4%). The average house price increased in the year to Q1 (January to March) 2026 to £198,000 in Northern Ireland (7.4%).
On a non-seasonally adjusted basis, average UK house prices increased by 0.3% between April 2026 and May 2026, compared with an increase of 1.5% in the same period 12 months ago. On a seasonally adjusted basis, average house prices in the UK were unchanged at 0% between April 2026 and May 2026.
Flat market
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said the market is struggling.
He added: “The housing market isn’t stalled, it’s stuck in slow-moving traffic. Affordability pressures, stamp duty and limited supply are all making households think twice before moving.
“The answer isn’t one silver bullet. Improve affordability, build more homes and reduce the tax on moving, and the traffic will start moving again.”
Jamie Alexander, Mortgage Director at Romsey-based Alexander Southwell Mortgages, said the market is flat.
He added: “The 2.7% annual figure sounds respectable until you look at what is actually happening month to month. Prices barely moved between April and May, and a chunk of that annual number is just the stamp duty rush from last year flattering the comparison. The underlying market is much closer to flat. The honest reason is supply.
“We have had decades of not building enough homes in the places people actually want to live, and no savings scheme or stamp duty tweak fixes that. Demand is not the problem. People still want to buy. What stops them is finding something affordable to buy in the first place.
“That said, I am cautiously optimistic about the second half of the year. There is a lot of pent up demand waiting for a reason to act.”
Better value
Matt Coulson, Founder at Rickmansworth-based Heron Financial Ltd, said too many factors are keeping people from buying and selling.
He added: “A 2.7% annual rise sounds like growth, but with inflation at 2.6% these prices are essentially flat in real terms, and month on month the market didn’t move at all. Part of the slowdown from 3.9% is a base effect from last year’s stamp duty rush rather than a genuine softening.
“The picture is a market that is stuck rather than falling. The demand is there; people still want to buy. What stops them is the monthly payment. Buyers can reach the loan amount they need, and then the cost of servicing it at today’s rates is what ends the conversation.
“If you want to unstick the market, aim help at the monthly payment rather than the deposit, which lenders have largely solved, and clear the friction holding up transactions, particularly on leasehold flats. Building more homes matters, but the faster wins are on demand and on the plumbing of moving home.”
Evren Ergin, Founder And Developer at ValuQ, said the figures aren’t as positive as they first appear.
He added: “Read past the headline. The story in this release is not 2.7%, it is 0.3%. That is how much the average price moved between April and May. A year ago the same month moved 1.5%. The annual figure is a rear-view mirror, and it is being swung by base effects from last year’s stamp duty deadline.
“Strip that out and the market is close to a standstill. Look forward instead of back and it is cooler still: asking prices fell 0.6% this month, the biggest June drop in 14 years, with near-record numbers of homes competing for buyers. So no, prices are not taking off.
“They are flat, and the annual number is the last part of the picture to catch up. And £271,000 is nobody’s house. Wales up 4.2% while England managed 2.3% tells you how much the national average hides. What matters to a seller is what their type of home, on their street, is actually completing at.”
Glacial pace
Ken James, Director at London-based Contractor Mortgage Services, said there’s an opportunity to find value in the market.
He added: “Has the housing market pressed pause? The property market hasn’t ground to a complete standstill, but it is clear that it’s become more measured, and 100% more price sensitive. For sellers, buyers are more selective than they were a couple of years ago, making realistic pricing and presentation more important than ever.
“For buyers, the slowdown could create opportunity, With less competition and more room to negotiate, those ready to move may find better value. The market is being shaped by higher borrowing costs, global uncertainty and changing political priorities, all of which have made households more cautious about making major financial decisions.
“With the latest PM switch and an air of a more upbeat political drum being beaten there may be some good news, Housing markets are driven by confidence. As mortgage rates stabilise and certainty returns, activity is likely to pick up again. This isn’t a broken market, it’s just one that’s adapting to a new economic landscape.”
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said affordability is an issue.
He added: “The housing market has not crashed, but it has certainly caught a cold. Prices are still moving, but at a glacial pace, and for many buyers the dream of ownership remains frozen solid. This slowdown is partly the stamp duty hangover, but the deeper problem is affordability.
“Wages have not kept pace with house prices, mortgage costs are still biting, and too many would-be movers are stuck because the jump to the next rung is simply too expensive. Britain does not have a demand problem. It has a supply problem dressed up as a market wobble.
“We need more homes in the places people actually want to live, faster planning decisions, and fewer political gimmicks that briefly heat up the market before leaving buyers with the bill. Until then, the market will keep thawing and refreezing, while first-time buyers are left out in the cold.”
Photo by Minku Kang on Unsplash.
