2026 Q2 UK property market review
Despite global political uncertainty, the UK housing market remained resilient in Q2 2026. National house prices rose by 1.5% annually, driven by strong 3% growth in Northern regions while London and the South lagged behind. Buyer demand and agreed sales (+1%) remained stable, and average UK rents grew to £1,353 (+2% annually), led by the North West. Despite mortgage cost concerns, major industry forecasters project cumulative house price growth between 18.5% and 20.4% through 2030, with rental yields further supported by the Renters’ Rights Act.
Insight highlights
Average UK house prices rose 1.5% annually, but Northern regions doubled that rate with 3% year-on-year growth, narrowing the capital-to-regional market gap to its tightest level since 2009
Average UK rents reached £1,353 per month (up 2.0% year-on-year excluding London), with the North West leading regional growth at 2.9%
Industry analysts project significant growth over the next five years, with forecasts from Savills and Knight Frank anticipating total capital appreciation between 18.5% and 20.4% by 2030
The impact of the Iran War and other ongoing global political challenges hangs over the UK housing market. However, property remained resilient and performed better than many were expecting in Q2.
Read on to learn more about:
- House prices
- Demand
- Rents
- Forecasts
House prices rising slowly despite challenges
House prices in the UK have proven their resilience through a number of political and economic challenges over the last 15 years, and Q2 2026 was no different. Global conflict will always be alarming, but the latest House Price Index from Zoopla shows:
- Property values are up by an average of 1.5% annually
- Prices are rising faster in Northern regions (average of 3% year-on-year)
- London and the South East are falling behind
That confirms the ongoing trend towards regional markets seen in recent years. Investors have been moving their money out of London and heading North. That is unlikely to change going forward as the Financial Times reports that the gap between London and the rest of the UK is at its narrowest since 2009.
Demand stays strong across the market
Demand for property in the UK remains cautious, but stable according to data from the RICS Residential Market Survey May 2026. The Zoopla House Price Index goes further and shows that relatively strong demand is the cause of the house price growth mentioned previously.
For example, first-time buyers are targeting homes worth an average of £10,000 more than this time last year. Overall sales agreed have increased by 1% in the same time frame. These are numbers that suggest the market is fundamentally healthy.
This is good news for investors who can expect further house price growth in the future because demand is holding up.
Rents continue to grow in most parts of the UK
The rental market offers further good news for investors. The June 2026 HomeLet Rental Index shows that the average UK rent has now reached £1,353 – growth of 1% in the last month and 2.0% annually (excluding London).
The South East (0.2%), South West (0.9%) and the East of England (1.2%) continue to lag behind. In contrast, investment property for sale in the North West has seen rents rise by 2.9% over the same period – another win for investors in the North West.
Forecasts for the future
Looking ahead to the rest of 2026, there are some concerns regarding the price of mortgages. Some analysts worry they will get more expensive if the Iran war goes on much longer. However, it is also true to say that inflation has been more resilient than feared, and the Bank of England has retained the current base rate of interest for longer than expected.
That should keep mortgage prices down. Savills still anticipates average house price growth of 18.5% in the next five years as a result. Knight Frank data shows more detail and forecasts:
- A total of 1.5% growth this year
- 3% growth in 2027
- 4% growth in 2028
- 4.5% growth in 2029
- 6% growth in 2030
- 20.4% growth in total by the end of 2030
When it comes to rents, Savills anticipates that continuing growth will be supported by the Renters’ Rights Act. The agency expects landlords will have access to more data and be able to make larger, one-off increases to rents as a result of the new legislation. This will support growing returns for investors in the coming years.
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