The latest consumer price inflation figures and house prices index from the Office for National Statistics reveal the CPI remained unchanged at 2.8% in May while the average UK HPI annual inflation was 3.8% in the 12 months to April 2026.
Experts and industry figures have described both figures as a “surprise” and “huge relief” with several forecasting that the Bank of England will hold interest rates steady as a result.
ONS head of housing market indices Aimee North said: “This month’s rise in the annual rate was partly due to figures being compared with an unusually large fall in house prices a year earlier, following the stamp duty changes across much of the country in April 2025.
“All English regions saw an increase in their annual rates this month except London, where the rate was unchanged. London remains the region with the lowest annual inflation.”
Nathan Emerson, CEO of Propertymark, said: “An increase in house prices reflects continued resilience within the housing market despite wider and ongoing economic pressures. While demand remains steady, affordability continues to be a challenge for many households, particularly first-time buyers.
“A well-functioning housing market relies on a balance between supply and demand, and long-term solutions are needed to improve affordability and consumer choice.
He added: “With inflation remaining unchanged at 2.8%, there is further evidence that relative stability within the economy may be starting to return. Attention will now turn to tomorrow’s Bank of England interest rate decision, which will be closely monitored by consumers and businesses alike, given its influence on borrowing costs and market confidence.”
Jason Tebb, president of OnTheMarket, said of the April UK HPI: “Given everything that has hit the wider economy over the past 12 months, this resilience in the market is remarkable. Increased stock, more choice and continued squeezed affordability are likely to keep prices in check for the foreseeable future, which is good news for first-time buyers in particular.”
Tomer Aboody, director of MT Finance, said: “The increase in average property values over the past 12 months is all the more surprising given tough market conditions but reflects softer values a year ago following the end of the stamp duty holiday. The reality now is that buyers are more cautious and not prepared to pay over-the-odds, particularly when they have so much choice.”
“Lack of affordability is the overriding concern for many, particularly first-time buyers and those purchasing in more expensive parts of the country such as London and the southeast. Lack of encouragement from the government has fuelled hesitation in both buyers and sellers, with many pausing and taking a ‘wait and see’ approach.
Amy Reynolds, head of sales at Antony Roberts estate agency, agreed that the mood among buyers is “still very cautious”.
She added: “People are paying close attention to the situation in the Middle East and its impact on energy prices – there are recent signs of improvement, but it feels hesitant.”
Richard Donnell, executive director of research at Zoopla said: “The jump in house price inflation in May is artificial and linked to the ending of last years stamp duty holiday. The sales market is weakening as we enter the summer with buyer demand down 14% on this time last year, yet there are still more homes for sale.
“House price inflation was on a downward trend and this remains the case. It’s a buyers market and the north-south divide in prices and market activity remains. People want to move but serious sellers need to price their home carefully if they are serious about selling in 2026.”
Ben Thompson, director of home moving strategy, Mortgage Advice Bureau, said: “Encouragingly, confidence among prospective homebuyers remains strong, with our research revealing that 75% feel confident about their mortgage options despite ongoing market uncertainty. This suggests that underlying demand for homeownership remains healthy, even as economic conditions remain mixed.”
