UK house price growth slowed to 1.3% in July as higher mortgage rates and economic uncertainty continue to dampen demand, according to Zoopla's latest house price index (HPI).

Sales agreed are 9% lower than last year, as higher mortgage costs and uncertainty cause some buyers to pause, and the market to experience "a sharper-than-normal summer slowdown", Zoopla said.

The average UK home is now worth £271,900, up 1.5% or £4,030 over the past year, although Zoopla commented that growth has become increasingly uneven across the country.

The average property has gained around £3,400 in value since the start of 2026, with the North West recording the strongest gains of £7,100, while average values in London have fallen by £3,270.

Mortgage rates, which eased from almost 5% in April to around 4.65% in June, nudged back up to approximately 4.75% in July as global uncertainty pushed up borrowing costs.

Zoopla estimated the increase has added around £125 a month, or £1,500 a year, to repayments for a typical buyer, with higher-value markets feeling the greatest impact.

The slowdown has coincided with an increase in the number of homes for sale across most regions, giving buyers greater negotiating power. Around 30% of homes listed since the second quarter remain unsold without a price reduction, while almost one-third of sellers may need to reassess asking prices ahead of the autumn market.

Regional performance also continued to diverge, the HPI revealed. The North East is the only region where agreed sales are ahead of last year, rising 4%, while Wales and the East Midlands have recorded the steepest declines, down 15% and 13% respectively.

Local markets have also varied widely, with Warrington, Hull and Dundee outperforming, while Bath, Oxford and Harrow have seen weaker demand and softer price growth.

Zoopla expects market activity to improve from September, provided mortgage rates remain stable, although it forecasts annual house price growth will slow further to around 1% by the end of 2026. The property portal said the North of England and Scotland are likely to remain more resilient than London and the South East, where prices could remain flat or post modest declines.

---