What the official ONS figures say about house prices, and how the industry is reading them
What the official ONS figures say about house prices, and how the industry is reading them The ONS UK House Price Index for May 2026, published in July, recorded annual growth of 2.
7%, with the average UK property valued at £271,000. Average prices increased by 0.3% between April and May 2026. A year earlier, the monthly change over the same period was 1.5%. The slowdown is real, but the ONS itself attributes a significant portion of it to a specific statistical cause that is worth understanding before drawing wider conclusions.
What the ONS says caused the slowdown
The ONS’s own commentary is explicit: the lower rate of annual growth in May 2026 is attributed, in material part, to a base effect following changes to Stamp Duty Land Tax in England and Northern Ireland in April 2025. The April 2025 threshold changes generated an unusually strong surge in completions as buyers rushed to complete before the new rules took effect. That elevated comparative period is now working through the annual figures, making the year-on-year growth rate appear softer than the underlying trend would suggest in isolation. A base effect means the comparison point is artificially high, not that the current performance is artificially low.
The regional divergence the national average does not show
The May 2026 ONS data contains the same regional divergence that has been visible throughout the year. Average property prices in London fell by 3.7% in the twelve months to May 2026. Prices in the North East rose by 5.9% over the same period. Those two figures, both accurate, both from the same index, describe markets that are behaving in almost opposite ways. Presenting the 2.7% national average without the regional context gives an incomplete picture of what the data actually shows.
The gap between the strongest and weakest regions reflects the affordability dynamics that have been reshaping demand since mortgage rates rose sharply in early 2026. Higher borrowing costs have their greatest impact in markets where property prices are highest relative to incomes, which is most acute in London and the South East. In more affordable markets, particularly the North East, the same rate environment has a proportionally smaller effect on monthly repayment affordability, and underlying demand from buyers motivated by genuine need rather than investment calculus has kept both transaction volumes and price growth more resilient.
How the market is reading the figures
Propertymark, the professional body for property agents, noted that the figures show the market remains resilient despite domestic and international pressures, while acknowledging that affordability challenges continue to affect buyers, particularly first-time buyers. Propertymark also drew attention to the Bank of England’s rate decision later in July and the Ofgem energy price cap announcement expected in August as the next significant signals for market confidence.
The broader industry reading, reflected across several commentaries following the ONS publication, is consistent with what the data shows: a market that is positive in aggregate, more selective in practice, and more sensitive to external conditions than in the recent past. The phrase that appeared most consistently was realistic pricing. Properties priced in line with current local comparable evidence continue to sell. Those that are not are taking longer. The ONS figure confirms that the market is growing. It does not confirm that every property in every location will grow at 2.7%.
The most useful way to read any ONS figure
The ONS UK House Price Index is among the most accurate measures of completed transaction prices available, because it is based on what buyers actually paid at registration. Its limitation is lag: the May 2026 data reflects transactions that completed weeks earlier. It is the most honest backward-looking measure. For current conditions, it should be read alongside more recent forward-looking indicators such as Rightmove’s monthly asking price data, Zoopla’s sales agreed tracker, and regional transaction data.
Talk to our team about what the figures mean for you
This article was originally published by BriefYourMarket and is reproduced here with their permission.
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