UK Property Market Update — July 2026

The market this fortnight

The UK property market entered the second half of 2026 with a clear message from sellers: price discovery is still under way. According to Rightmove’s June 2026 House Price Index, the average asking price fell 0.6% (−£2,113) over the month to £376,191 — the largest June decline recorded in fourteen years. Summer slowdowns are a normal feature of the housing calendar, but the scale of June’s drop reflects something more structural: a record volume of homes listed for this time of year, giving buyers genuine choice and prompting many sellers to revise expectations rather than wait for offers that are not materialising at the original price.

For the overseas buyers IREIS Properties advises, this is a constructive shift. A market where sellers are moving to meet buyers is one where due diligence can proceed at pace, without the competitive bidding pressure that characterised 2022 and 2023. It does not signal distress — it signals a reset towards values that mortgage lending at today’s rates can sustain.

London sits within but distinct from the national picture. Rightmove’s June 2026 data shows London asking prices 1.2% below their level a year earlier — a continuation of the moderate annual softening the capital has experienced since late 2025. Context matters: the typical London home was valued at approximately £534,375 in May 2026, according to the Halifax House Price Index. A modest correction from that base is a recalibration, not a retreat. For an investor with a five-to-ten-year horizon, a more measured entry into one of the world’s most supply-constrained major cities remains a credible proposition.

Interest rates: a hawkish hold

On 18 June 2026, the Bank of England Monetary Policy Committee voted 7–2 to maintain Bank Rate at 3.75%. The two dissenting members voted for a 0.25-percentage-point rise to 4.0% — a more hawkish split than the 8–1 majority seen at the April meeting. UK CPI held at 2.8% in May 2026, but services inflation — the MPC’s key watch indicator — rose to 3.7%, keeping the Committee cautious even as global energy prices have eased somewhat from their recent peaks.

For overseas buyers, the practical reading is unchanged: build your investment case on rates as they are, not on a cut that has not arrived. There is, however, a modestly positive development on mortgage pricing. The average two-year fixed-rate mortgage fell to 5.07% in June 2026, down from 5.18% the previous month, as lenders passed on lower swap rates. That is a small but real reduction in the cost of leverage for those financing a purchase. For a detailed view of how purchase costs and returns interact at current rates, our rental yield calculator is the most direct starting point.

London focus: the 880,000-home agenda

The most consequential longer-term development for London property investors this month is not a price index — it is the government’s confirmed ambition for London’s housing supply. Following a public consultation that closed in March 2026, the revised National Planning Policy Framework has embedded a presumption in favour of suitably located development. For London, the new target is explicit: 87,992 new homes per year over the next decade, equivalent to 880,000 homes across the new London Plan period, per London City Hall. To support delivery, the government announced a £39 billion ten-year Social and Affordable Homes Programme, with £1.5 billion specifically allocated to London.

These are decade-long policies, not near-term supply events. Their significance for investors is twofold. First, they signal serious political commitment to unlocking land and accelerating planning — which, if it progresses, will over time moderate the supply constraint that has supported London values since the 1990s. Second, the zones where public infrastructure investment concentrates — regeneration areas such as Nine Elms, Earls Court and the evolving Wood Wharf extension at Canary Wharf — are precisely where private capital tends to follow. London’s private rental market meanwhile continues to show the structural tension that underpins landlord returns: demand for London rentals rose 6% in the four weeks to late May 2026, per the Zoopla Rental Market Report (June 2026), while average rents stand at approximately £2,290 per month. Figures are approximate and subject to market conditions.

For a broader view of how IREIS Properties frames long-term opportunity within the Zone 1–4 pipeline, our 2026 London investment guide covers the key fundamentals. You can also compare the current picture with our June 2026 market observation for context on how conditions have evolved across the fortnight.

What this means for overseas buyers

Three points for buyers reviewing their position this summer.

Currency timing. Taiwanese buyers should consult a specialist FX broker to monitor the NTD/GBP rate and, where possible, lock in a forward contract ahead of completion. Currency decisions belong with dedicated professionals, not with market commentary.

Tax position. For investors who plan to sell in due course, Capital Gains Tax on UK residential property for the 2026/27 tax year is 18% for gains within the basic-rate income band and 24% for gains above it, with a £3,000 annual exempt amount, per GOV.UK. Rates are subject to change; consult a qualified UK tax adviser. If you are holding personally with a mortgage, note that under Section 24 of the Finance Act 2015 — fully phased in since the 2020/21 tax year — individual landlords receive a 20% basic-rate tax credit on finance costs rather than a full deduction, meaning higher-rate taxpayers receive less effective relief than under the old system. Many overseas investors weigh the merits of holding through a UK limited company as a result; a qualified UK tax adviser can model both structures against your specific income position.

Transaction costs. Non-resident buyers face a 2% surcharge on Stamp Duty Land Tax, and additional surcharges apply if you already own residential property elsewhere in the world. Rather than estimate, use our UK Stamp Duty Calculator to calculate your exact liability based on your own circumstances. Our UK Property Costs and Taxes Overview sets out the full picture of purchase costs, ongoing taxes and disposal costs in one place.

IREIS Properties guides Taiwanese and overseas Chinese investors through every stage of a UK purchase from abroad — shortlisting verified new-build developments, facilitating legal and mortgage introductions, overseeing completion, and connecting clients with qualified managing agents for ongoing rental management. For a structured view of all running costs and tax obligations, explore our knowledge hub at /en/guides/market/. To discuss how the July 2026 market fits your own plans, you are welcome to contact our trilingual London team.