| Latest data confirms the average UK asking price fell to £376,191 in June, a 0.6% monthly drop | A north–south divide remains, with prices softer in the south but stronger in the north | Mortgage affordability has improved slightly, with the average two‑year fixed rate easing to around 5.07% |
As we move through the summer months, the UK housing and mortgage markets are showing signs of resilience but also a clear shift towards more cautious, price sensitive behaviour from both buyers and lenders.
The latest data1 shows that the average asking price fell to £376,191 in June, a 0.6% monthly drop and the largest June decline in 14 years, leaving prices 0.5% lower than a year ago.
This reflects a seasonal slowdown, but also heightened competition, with the number of homes for sale remaining historically high. As a result, sellers are increasingly pricing more realistically to attract buyers in a market where choice is elevated and demand is more selective.
A clear north–south divide persists. Prices have softened across southern England and Wales, while more affordable regions, including the North East and Scotland, are holding up better, underlining the ongoing impact of affordability constraints on regional performance.
Research by Savills highlights a broader slowdown in momentum. Annual price growth has eased, and the firm now forecasts a small overall price fall of around 2% in 2026, with the greatest pressure in higher-value markets. At a local level, Scotland and the North West continue to show relatively stronger growth, with some areas still recording gains above 8%.
In the mortgage market, higher borrowing costs and rate volatility have driven notable changes in borrower behaviour. Demand for variable and tracker mortgages more than doubled2 in the six months to April, rising from 6% to 13% of product searches, as some borrowers anticipate future rate reductions. At the same time, there has been a clear shift towards shorter-term fixed deals, while the popularity of five year fixes has declined, reflecting reluctance to lock in at elevated rates.
Encouragingly, mortgage affordability has improved slightly, with the average two year fixed rate3 easing to around 5.07%, providing modest support to buyer confidence.
Overall, the market remains active but increasingly price-sensitive, with regional divergence and cautious borrower behaviour set to shape conditions through the second half of the year.
1&3Rightmove 2026, 2Moneyfacts 2026
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.