As part of our ongoing commitment to provide you with everything you need to know about the UK property market, we’re rounding up what happened during Q2 2026 and what to expect from the housing market for the rest of the year.
It’s safe to say that between heatwaves, a resigning Prime Minister, the World Cup and everything happening overseas, it’s been a busy few months for the media, the economy and of course, the UK property market.
With Spring/Early Summer usually the peak of activity for homebuying, what happened across the property market in Q2 2026 and what can we expect going forward?
What’s happening in the UK housing market now that Q2 2026 is done?
While Q1 results indicated that house prices were down on average, research did show that asking prices saw their biggest jump in a single January period for nearly 25 years, which suggested that positivity was returning to the market.
Unfortunately, it appears that the effects of the Middle East conflict is now being felt across the residential market with mortgage rates now higher than they were at the start of the year and an interest rate that has held at 3.75% all year.
That said, according to data from the House Price Index, the average UK house price is £270,080 as of June 2026, an increase of 1.3% year-on-year and a slight increase based on January 2026, which would suggest that determined buyers and the usual increase of activity during the early Summer is keeping prices moving north.
According to Amanda Bryden, head of mortgages at Halifax: “Property price trends continue to reflect the uncertainty linked to developments in the Middle East. Despite recent cuts to mortgage rates, higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers and temper demand.”
This is particularly felt within mortgage rates. At the start of the year, Savills predicted that the number of people buying homes between 2025 and 2030 would be boosted by falling mortgage rates, while more relaxed affordability tests from lenders would hopefully boost transactions.
Unfortunately, mortgage rates are now above 5% on average, which is mostly being attributed to both the conflict and affordability issues.
What can we expect from house price growth over the rest of the year?
Unfortunately, the UK forecast isn’t particularly positive. The average UK house price is expected to drop by 2% according to Savills, driven by rising mortgage costs.
This is a huge shift from their original prediction, which was the opposite way - they originally said 2% growth.
In some rare good news, Savills actually remains optimistic about the long-term forecast and suggests that prices could increase by as much as 18% by 2030.
When broken down into an annual forecast, this translates to a fall of 2% this year, before we see growth of 2.5% next year, 5% in 2028 and 6% in both 2029 and 2030.
For UK homebuyers then, the question is likely one of patience. If you’re looking to make the most of a sale and buy your next property, it may be worth waiting. If you’re buying for the first-time, you may be able to find a better deal as the market corrects. The only thing to consider is mortgage rates and what kind of deal you may be able to find regarding products.
How do things look for first-time buyers?
According to David Thomas, the chief executive of Barratt Redrow, this is the most challenging time to be a first-time buyer since the financial crisis, as rising interest rates, student debt and affordability issues make it borderline impossible for young people to get on the housing ladder.
Stats suggest there are 6% fewer first-time buyers than there were in the market a year ago and this isn’t set to improve as the market shifts against them.
According to Zoopla, this is largely due to first-time buyers ‘not compromising on what they buy’, with around 53% of first-time buyers looking to purchase a 3-bedroom property. It’s important to note that while changes to mortgage affordability testing, which came into effect last year, made homes more accessible to first-time buyers, this is actually pushing up entry-level prices which is having repercussions in creating house price inflation across the market.
In fact, Zoopla suggests that for anyone looking to buy for the first time, now might be the time, as waiting is unlikely to deliver either a lower price, or a better choice of home, although this obviously depends on where you’re looking to buy.
All of this also shows why Shared Ownership continues to be a critical scheme for many buyers and we’re increasingly seeing more enquiries around property in key regions.
If you’re looking for a more accessible way into the market, you’ll want to take a look at some of our Shared Ownership properties.
