The UK housing market enters July with a clearer sense of direction. Nationwide’s latest House Price Index, released on 1 July, shows the average property price held at £277,484 in June, flat on the month after May’s 0.6% fall. Annual growth edged up to 2.2%, from 1.7% in May, suggesting the spring correction was a pause rather than the start of a sustained decline.
Robert Gardner, Nationwide’s chief economist, pointed to declining oil prices as a potential turning point. “If the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated,” he said.
For Norfolk homeowners and buyers watching from the sidelines, the message is cautiously positive. Prices are not falling, but the market is working harder than it was twelve months ago.
The most encouraging signal for buyers this week comes from the mortgage market. Rightmove’s weekly tracker shows the average two-year fixed rate has fallen to 5.00%, down from 5.02% a week earlier. Five-year fixes now average 4.99%, dipping below the 5% mark for the first time since rates began climbing in March.
Best-buy rates continue to compress. Coventry Building Society and Nationwide both offer two-year fixes at 4.24% for borrowers with 35-40% deposits. Barclays holds the lowest five-year fix at 4.33%. Across every deposit level tracked by Rightmove, rates fell or held steady week on week, with the largest drops at 60% loan-to-value, where the average two-year fix fell 0.06 percentage points to 4.44%.
These reductions remain modest, but the direction of travel has been consistently downward for three consecutive weeks.
Brent crude fell to $72 per barrel on 1 July, its lowest level since late February and down 25% over the past month. The collapse follows progress in US-Iran peace negotiations and a gradual reopening of shipping through the Strait of Hormuz.
This matters directly for the housing market. Energy prices feed into inflation, and inflation determines whether the Bank of England raises, holds or cuts interest rates. With oil retreating to pre-conflict levels, the pressure on the BoE to hike rates has eased considerably.
UK inflation stood at 2.8% in May, still above the Bank’s 2% target. But falling energy costs could push that figure lower in the months ahead, reducing the likelihood of the rate increase some analysts had anticipated. The BoE held at 3.75% in June, voting 7-2. Its next decision on 30 July will be the most closely watched in months.
Beneath the positive headlines on prices and rates, the Bank of England’s latest lending data tells a more cautious story. Mortgage approvals for house purchases fell to 56,205 in May, down from 66,034 in April. That is the lowest figure since December 2023 and well below the six-month average of 63,300.
Approvals are a leading indicator of future transactions. The sharp drop suggests that the rate increases earlier this year, triggered by the Iran conflict and rising gilt yields, are now filtering through to buyer behaviour. The effective interest rate on newly drawn mortgages rose to 4.22% in May, up from 4.08% in April.
HMRC’s separate transaction data, covering completions rather than approvals, paints a different picture. An estimated 98,450 residential sales completed in May, 17% higher than May 2025, though 2% below April 2026. The annual increase largely reflects lower activity in spring 2025 following stamp duty threshold changes.
Andy Burnham, widely expected to become Prime Minister by 20 July, used his first major policy speech on 29 June to outline ambitious housing plans. He pledged the largest council house building programme since the post-war era, funded by redirecting the existing £39 billion affordable housing budget entirely towards social rent homes.
More significantly for homeowners, Burnham has voiced support for a land value tax to replace stamp duty, a move that could fundamentally reshape property transaction costs. Details remain scarce, but the direction signals a shift in how property wealth is taxed.
For the housing market, political transition adds short-term uncertainty. But gilt yields, which drive mortgage pricing, have remained stable through the leadership change. The 10-year gilt yield sits around 4.82%, broadly unchanged from the week before Starmer’s resignation.
Across the 324 local markets we monitor in Norfolk and Suffolk, conditions remain firmly in buyers’ favour. The average SSTC rate sits at 20%, meaning four out of five listed properties remain available. The average time on market is 317 days, and 79% of locations are classified as buyers’ markets.
But the picture varies dramatically by location. Brandon and Alpington both show 50% of properties under offer, joining Alburgh (58%) in the region’s strongest seller markets. Terrington St Clement is one of the fastest-selling locations at just 36 days on average, while Hempnall follows at 37 days.
At the other end, coastal locations like Castle Rising, Burnham Deepdale and Field Dalling show 0% under offer, reflecting the ongoing rebalancing in the second-home market. In these areas, pricing accuracy and presentation quality are the decisive factors in achieving a sale.
The Nationwide stabilisation is welcome news for sellers who may have been concerned about a sustained price decline. Annual growth of 2.2% confirms that accurately priced properties continue to hold their value.
The challenge lies in the approvals data. Fewer mortgage approvals today mean fewer completions in the months ahead. Sellers entering the market this summer face a more selective buyer pool than spring, making first impressions, photography quality and pricing strategy more important than ever.
In Norfolk, where the average time on market sits at 317 days, the sellers achieving the strongest results are those pricing at market value from day one. The gap between realistic and aspirational pricing continues to widen.
Falling mortgage rates and reduced competition create a window of opportunity for buyers prepared to act. With 79% of Norfolk and Suffolk locations currently classified as buyers’ markets, negotiating power remains firmly with purchasers.
The BoE’s 30 July decision will set the tone for the rest of the summer. If the Bank holds rates and oil prices continue to fall, mortgage costs could ease further. But buyers with existing mortgage agreements in principle should be mindful of expiry dates, securing current rates rather than waiting for further reductions that may not materialise quickly.
Halifax releases its June House Price Index on 7 July, providing the next major data point on national prices. Nationwide’s June data showed stabilisation. If Halifax confirms that trend, it would mark the clearest signal yet that the spring correction has run its course.
Mortgage rate movements will continue through the week as lenders adjust to falling swap rates. The BoE’s 30 July meeting looms on the horizon, and markets will be watching inflation data and oil prices closely in the run-up.
For Norfolk and Suffolk homeowners considering their next move, our property market reports cover conditions across all 324 locations we monitor, updated monthly. Find your local market and see how conditions compare across the region.
