Waiting for a house price fall? In real terms, it has already happened.

A common question about UK house prices is whether a big fall is on the way. Adjusted for inflation, one has already happened.

In cash terms, prices look healthy. The UK House Price Index for July 2026 is 4.5% above January 2023 and 2.7% above its September 2022 high: a record high. But consumer prices rose 13.1% over the same period. After inflation, UK house prices are 7.6% lower than in January 2023, and 11.1% below the September 2022 high.

Cash prices recovered. Real prices did not.

The fall in cash prices was small and short. From the September 2022 high, the index fell 4.1% to February 2024. It first passed the 2022 high in March 2025, dropped back in April 2025, the month after temporary stamp duty relief in England and Northern Ireland ended on 31 March, and has stayed above it since June 2025.

The real index tells a different story. Between September 2022 and February 2024 it fell 10.3%, and its low so far came in April 2025, 12.3% below September 2022. It has not recovered: since February 2024 it has moved sideways, between 91.2 and 95.6 (January 2023 = 100), and in July 2026 it stood at 92.4. In real terms, UK house prices are now lower than in January 2019, where this chart starts.

The fall is not waiting to happen. In real terms it happened in 2022 and 2023, and rising cash prices have since masked it.

The South has taken the hit

Every English region, Wales and Scotland is down in real terms since January 2023. The South is down most. In London, real prices are 14.7% lower, in the South West 13.5%, in the South East 13.1% and in the East of England 12.3%. In all four, prices are lower in cash terms too, by between 0.9% (the East) and 3.6% (London).

Further north, real falls are small. The North West (−0.8%), the North East (−2.1%) and Yorkshire and The Humber (−3.5%) have come closest to keeping pace with inflation, along with Scotland (−0.8%). Wales is down 5.8%.

Northern Ireland is the exception: up 10.2% in real terms, and 24.6% in cash. Its figures are compiled differently, from HMRC stamp duty data, and published quarterly, so they are less directly comparable with the rest of the UK.

London against Manchester shows how wide the split is. Since January 2023, Manchester's cash prices have risen 9.1%, a real fall of 3.5%; London's have fallen 3.6% in cash, a real fall of 14.7%. Over the whole chart, from January 2019, London's real prices are down 18.7% and Manchester's are up 8.9%.

The places beating inflation

Only seven councils in England and Wales with at least 1,000 sales a year have beaten inflation since January 2023, and six of them are in the North West. Oldham leads, up 4.8% in real terms, followed by Blackburn with Darwen (+3.1%), Liverpool (+3.0%), Burnley (+1.0%), Hyndburn (+0.9%), Bassetlaw in the East Midlands (+0.7%) and West Lancashire (+0.2%). Calderdale is level (0.0%).

Even the winners have not won by much. Oldham's cash prices rose 18.5%, and most of that was inflation.

At the other end, the biggest real falls are in central London and on the coast. Westminster is down 36.7% in real terms (28.4% in cash), Kensington and Chelsea 26.1%, Torridge in north Devon 24.6%, Tower Hamlets 23.4% and Hammersmith and Fulham 22.7%. Seaside towns in the South East and South West follow: Hastings (−22.4%), Eastbourne (−22.2%), Torbay (−21.6%) and Thanet (−20.9%), with Worthing, Bournemouth, Christchurch and Poole, and the Isle of Wight not far behind.

Treat the extremes with care. Council figures in the UK House Price Index are less reliable where there are few sales or where a small number of very expensive homes changes hands, which is the case in Westminster and Kensington and Chelsea. Westminster's own index was at its highest in January 2023, the starting point here, which makes its fall look larger. Torridge only just meets the 1,000-sale threshold.

Where PropertyExtra has launch areas

Two of the councils beating inflation are among the towns and cities where PropertyExtra has launch areas: Oldham (+4.8%) and Liverpool (+3.0%). Newcastle upon Tyne (−0.8%) and Wolverhampton (−2.3%) are close behind, then Manchester (−3.5%) and Walsall (−4.5%).

Six of the nine rose by 8% or more in cash, and still only two beat inflation. Sheffield is down 8.6% in real terms, Bristol 11.6% and Leicester 13.2%; in Bristol and Leicester, cash prices have fallen slightly too. Leicester's index was at a local high in January 2023, which makes its fall look larger. These councils are examples, not a sample: PropertyExtra chose them.

Track the same homes and…

The UK House Price Index compares all the homes sold each month and adjusts for the kind of homes they are. PropertyExtra builds its own index a different way: it follows the same homes, comparing what each one sold for with what it last sold for, from HM Land Registry's Price Paid Data. It covers England and Wales, by postcode area.

Across England and Wales, the two agree almost exactly. From the first quarter of 2023 to the first quarter of 2026, after inflation, our repeat-sales index is down 6.3% and the UK House Price Index is down 6.2%. In cash terms, both are up about 3% (2.8% and 2.9%).

Locally, the direction mostly holds, but Manchester, Newcastle, Oldham and Liverpool look a little weaker when you track the same homes:

• Manchester (M): repeat sales −2.7%, against +1.3% for Manchester council in the UK House Price Index.
• Newcastle (NE): −1.6%, against +1.8%.
• Oldham (OL): +2.5%, against +5.6%. Still ahead of inflation on both measures.
• Liverpool (L): −0.5%, against +0.5%. Within half a point of inflation on both.

In London, Bristol and Sheffield it goes the other way. The E postcode area in east London is down 9.3% on repeat sales, against 11.2% for London as a whole. That comparison is with all of London, including central boroughs such as Westminster and Kensington and Chelsea, where prices fell furthest, so much of that gap is geography, not method. Bristol (BS) is down 6.8%, against 9.9% for the city council. Sheffield (S) is also less negative on repeat sales: −1.0%, against −3.1%. In Leicester, Walsall and Wolverhampton the two measures are within half a point.

These gaps are not errors on either side. The two indices measure different things over different places. A postcode area is usually much larger than the council it is compared with: Manchester council holds fewer than half of the M area's postcode districts, and the NE area reaches well beyond Newcastle. A repeat-sales index only sees homes that have sold at least twice, so new-builds count only when they are resold, and it cannot see extensions or refurbishments between sales. The window here uses whole quarters and ends in March 2026, so the figures differ slightly from the monthly ones above.

What does not change: after inflation, prices across England and Wales are down, by about the same amount on both measures.

What it means for investors and landlords

This section describes what the figures show. It is not financial advice.

Cash gains are not real gains. A home that tracked the UK index since January 2023 is worth 4.5% more in pounds, and buys 7.6% less. Buying and selling costs come on top.

Borrowing changes the arithmetic. Inflation also shrinks the real value of a mortgage. Take an illustrative purchase in January 2023 with a 25% deposit and an interest-only loan for the rest. If the home tracked the UK index, the owner's equity would be up about 18% in cash by July 2026 and about 4% in real terms, even though the home itself is down 7.6% in real terms. That sum leaves out mortgage interest, rent, costs and tax, each of which can be larger than the gain.

Where mattered more than when. Over the same three and a half years, the gap between the best and worst councils in England and Wales is more than 40 points in real terms, from Oldham's +4.8% to Westminster's −36.7%.

A real fall can continue quietly. If cash prices stand still while inflation runs at 3% a year, real prices fall by about 3% a year, with no headline fall at all.