UK housing market conditions remained weak in July 2026, but the latest RICS survey suggested the pace of deterioration may be easing nationally even as London darkened sharply. The national house price balance improved to -30% from -32% in June, with new buyer enquiries steady at -28% and agreed sales unchanged at -30%, leaving activity deep in negative territory but above the lows seen after the Iran conflict began. The sharpest weakness was in the capital. RICS said London surveyors' gauge of expected prices over the next 12 months fell to -23 in July from -10 in June, the weakest reading since October 2023, while the national year-ahead price expectations balance remained positive at 4, down from 8. The gap underscores how stretched affordability and larger mortgage burdens are weighing more heavily on London, where the average home costs more than £500,000, about double the national average. Mortgage costs and policy uncertainty remain key drags. Moneyfacts data showed the average two-year fixed mortgage rate at 5.62%, around 0.8 percentage points above the level before the United States and Israeli attacks on Iran disrupted expectations for further Bank of England rate cuts in 2026. RICS said the wider market backdrop remained lacklustre in July, though short-term sales expectations improved for a fourth straight month to -14 and the 12-month sales outlook turned positive at +3, the strongest since the Iran war began. RICS chief economist Simon Rubinsohn said geopolitics, domestic politics and mortgage costs were still weighing on sentiment, while subdued conditions made a near-term increase in housebuilding unlikely and new landlord regulations were acting as a drag on the rental market.