UK Housing Market Today: You Need to Read Between The Lines

The housing market has rarely been as complicated and nuanced as it is right now.

On the one hand, a major international conflict has caused worries in the UK about rising inflation, interest rates and energy prices.

But on the other hand, house prices are holding up. Additionally, there are 5% more homes on sale than usual at this time of year. Properties are also selling as quickly as before.

So, what’s really going on? I see three big factors at play.

Underlying market resilience

Firstly, the housing market is fundamentally quite strong.

Despite the house building that’s going on, there’s an ongoing shortage of homes. Official figures say 300,000 new homes a year are needed to match population growth and increased lifespan. The growth in households also plays a part as families change through divorce and so on.

Therefore, even in rocky economic times such as these and possibly rockier times to come later this year. Supply is relatively low, so house prices remain relatively stable.

Affordability

Secondly, although prices have remained roughly static for some months, buying is slightly more affordable for some in certain areas when compared to a year ago.

That’s because wages grew 4.2% on average in 2025 according to government figures. Another 3% is expected in 2026. Meanwhile, house price growth, according to most of the respected indices, has been only 2% to 3%. Some say this number is even less.

The housing market time lag

Thirdly, timing. This is the big one. The fact is that it takes some time for statistics to reflect the day-to-day mood music amongst buyers and sellers.

So far, the hard figures look reassuring. For example, Nationwide says house prices rose 0.6% in the month to April. Meanwhile, Rightmove says asking prices of homes coming to the market rose 0.8%. The Land Registry’s latest data reflects a 0.1% monthly rise. 

However, sentiment is undoubtedly changing, and this isn’t yet reflected in those stats.

A new survey shows that 24% of people who started selling their homes in the first quarter of 2026 have now changed their minds.

Likewise, a monthly sentiment survey amongst estate agents shows increased pessimism. Fewer agents now believe people will sell and buy over the rest of 2026.

Some big estate agencies have had a rethink about 2026 as well.

One major agency expects prices to grow just 1.5% this year, instead of its original 3% forecast. Likewise, another agency says prices will grow 2% instead of the 4% it said early on.

And of course, there’s a lag in mortgage rates, actually impacting the market.

The average two-year fixed deal rose from 4.83% in early March 2026 to 5.78% in May 2026. And over the same period, the average five-year fix rose from 4.95% to 5.68%.

These factors take time to impact prices and transaction volumes. That’s why house price indices suggest the market is stronger than the mood of the country might suggest.

Housing market crash?

It’s important right now to say there’s no sign of a housing market crash.

There are many safety valves which prevent that from happening in these circumstances. Interest rates can go up and down in response to inflation. Furthermore, mortgage lenders have many initiatives to help any homeowner having difficulties meeting repayment schedules.

But for the reasons I’ve set out, the market could slow as summer continues.

This will especially be the case as more expensive mortgages come on stream. This is on top of rising inflation and steeper energy crises.

So what to do?

In my opinion, we all still have to get on with our lives. Therefore, so long as the sums add up, there’s no reason to put plans to sell or buy on hold.

But sellers in particular must be acutely sensitive about the cost-of-living problem. This is not the time to set high asking prices or hold out if a reasonable offer is made.

And buyers, if they require a mortgage, should seek a broker’s advice on what deal best suits their circumstances, now and in the longer term.

It’s also wise for buyers and sellers alike to look at some of the under-the-radar measurements of the market, as well as the obvious monthly house price indices.

So, check out whether mortgage approvals are going up or down. Approvals are the first step in the long journey of house purchase. Therefore, if approvals go up, it’s likely that the market will be pretty strong for some months to come. If they falter, it’s the reverse.

Likewise, check estate agents’ websites and the portals to see if large numbers of homes in your area have reduced their asking prices. If so, you could negotiate a good price with a seller. But conversely, if you are selling, don’t be over-ambitious with the asking price.

Check out local Propertymark estate agents. Speak to them directly about local market conditions. They are uniquely placed to have this knowledge. They can advise you on the best timing, pricing and marketing strategy if you are selling.

I sense a tricky summer market to come.

But it’s not impossible to navigate a way through the maze. You just have to soak up all the available information, speak to the right people, and hold your nerve.

I’ll be back next month to see how you’re getting on!

Last Updated: May 18th, 2026