UK house price inflation accelerated to 3.8% in the year to April, although economists and lenders pointed to the distorting impact of last year’s stamp duty changes and ongoing affordability pressures.
Average UK house prices rose by 3.8% in the 12 months to April 2026, according to the latest data from HM Land Registry and the Office for National Statistics, marking the strongest annual rate of growth since March 2025.
The increase follows a revised annual growth rate of 0.0% in March and was largely driven by a base effect. House prices rose by 0.7% between March and April this year, compared with a 2.9% monthly fall during the same period in 2025 following changes to Stamp Duty Land Tax (SDLT) in England and Northern Ireland.
On a seasonally adjusted basis, UK house prices increased by 0.6% between March and April 2026.
Regionally, the North East recorded the strongest annual growth, with prices up 9.9% over the year. London remained the weakest-performing region, with house prices falling by 2.1% annually.
BASE EFFECT DRIVES HEADLINE FIGURE
Paige Tao, economist at PwC UK, said: “Today’s ONS data shows house prices rose 3.8% in the 12 months to April 2026, the highest annual rate since March 2025. But the headline is misleading; last April’s stamp duty changes pulled transactions forward, leaving a weak base that inflates today’s number.
“Transactions fell 3% to 101,030, as buyers remain cautious about big purchases amid rising energy costs and cost-of-living concerns. Elevated mortgage rates further squeezed affordability.
“But there are two counterweights. First, sellers are competing hard. Listings postponed from last winter still haven’t cleared, and landlords offloading ahead of the Renters’ Reform Bill are adding to the pile. Second, major lenders cut fixed-rate deals last week as markets settle following the initial shock of the US-Iran conflict.
“With a framework agreement now in place and no evidence of second-round inflationary effects so far, mortgage pricing should ease further. That could open a real window for first-time buyers looking to step onto the ladder.
“London house prices have now fallen for eleven consecutive months. Stretched affordability in the capital is meeting a structural shift: hybrid and remote working continues to reshape where people choose to live, pulling demand outward.
“Outer London has broadly tracked England’s average growth over the past two years, while inner London has lost ground.”
AFFORDABILITY REMAINS A CHALLENGE
Tomer Aboody, director of specialist lender 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.
“With further reductions in base rate on hold for the foreseeable future, and higher stamp duty due to the lack of any concessions this year, there is little incentive to make a move unless you really have to.
“Despite recent reductions in mortgage rates, pricing is still higher than a year ago, so needs-based buyers who have to move are taking on higher loan-to-values in order to be able to buy.”
The latest figures suggest the housing market continues to be shaped by the after-effects of tax changes, affordability constraints and regional variations in demand. While annual growth has strengthened on paper, industry commentators believe underlying market conditions remain challenging for many buyers.
