Market Update · May 2026
A Market Holding Its Breath
Prices remain resilient on paper, yet the signals beneath suggest a more cautious spring than anticipated.
The headline figures tell one story. The detail tells another.
On the surface, the UK property market looks steady enough. Nationwide's latest index recorded annual price growth of 3% in April, nudging the average UK home value to £271,700. Month-on-month, prices edged up 0.4% — a reading that defied many forecasters who had pencilled in a decline. Zoopla, meanwhile, pegged annual growth at a more modest 1.3%.
But look behind the numbers and a different picture comes into focus. Values are coming under pressure and a significant proportion of sales are completing at levels lower than expected. Those positive indices largely reflect offers agreed in late 2025 and early 2026 — before the Iran conflict began reshaping the economic outlook and before mortgage rates made their sharp climb back upward.
"As these prices were negotiated a few months ago, this may be why the figures aren't reflecting a softening market."
— Gareth Lewis, Deputy Chief Executive, MT FinanceMortgage rates: a meaningful shift
The financing landscape has changed considerably since January. The average two-year fixed mortgage, which stood at 4.83% at the start of March, has climbed to 5.67% as of early May. Five-year fixes have moved from 4.95% to 5.69% over the same period — a 74 basis-point rise that translates into hundreds of pounds more per month for the average buyer.
The Bank of England's Monetary Policy Committee voted to hold the base rate at 3.75% on 30 April, and Oxford Economics currently forecasts rates to remain on hold through to Q3 2027. UK inflation reached 3.3% in March and is expected to climb further, leaving the MPC with little room to ease.
Somewhat counter-intuitively, rising rates have prompted a surge in remortgaging activity. March 2026 saw 51,300 remortgage approvals — the highest monthly figure since October 2022 — as homeowners scrambled to lock in before rates move higher still.
Market signals at a glance
Strong regional divergence
As is often the case in uncertain markets, regional differences are becoming more pronounced. Scotland and the North West are outperforming, while London and the South East face considerably more headwind.
Outperforming
- East Renfrewshire +7.9%
- East Dunbartonshire +7.1%
- Renfrewshire +6.8%
- Northern Ireland (positive)
- North West England (positive)
Under pressure
- London (RICS net balance −40%)
- South East (−24%)
- East Anglia (−26%)
- Prime Central London subdued
"Surveyors have turned more negative on buyer demand and sales expectations — yet the 12-month price outlook remains positive, with a net balance of +33% expecting prices to edge upward."
— RICS UK Residential Market Survey, Spring 2026What this means if you're buying or selling
Properties priced accurately continue to attract offers. With 6% more homes on the market, buyers have more choice — anything that feels overpriced will simply sit.
Mortgage costs have risen but haven't reached 2023 peaks. Motivated sellers are prepared to negotiate. RICS 12-month sentiment remains positive — a net balance of +33% expect prices to edge upward.
Transaction timelines are lengthening. With market sentiment fragile, keeping momentum in a chain has never been more important. Speak with your agent frequently.
Thinking of buying, selling, or simply want to understand what your home is worth in today’s market?
Speak to Our Team
Source Jayden
