Annual growth also picks up, though regional divide between north and south persists
UK house prices rose in June for the first time since February, with average property values increasing by 0.2% between May and June, taking the typical price to £299,330.
The latest Lloyds House Price Index, previously known as the Halifax House Price Index, showed annual growth also strengthened, rising to 0.6% from the previous month.
“Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations,” said Amanda Bryden (pictured right), head of mortgages at Lloyds. “While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move.
“While latest industry data shows the number of new mortgage approvals dropped in May, this wasn’t unexpected given the spike in rates seen earlier this year, and we’d expect to see activity recover assuming borrowing costs continue to fall.”
First-time buyers saw stronger annual price growth of 0.8% in June, up from 0.3% in May. The average first-time buyer property now costs £240,433, which Bryden said pointed to resilient demand in that part of the market.
“Looking ahead, we expect the housing market to continue moving at a measured pace,” she said. “Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor. The outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving.”
“When taking a broad view of the property market and the wider economy, it is encouraging to see average UK house prices deliver growth, both month on month and year on year,” said Nathan Emerson (pictured right), chief executive of industry body Propertymark.
“However, with Bank of England data showing mortgage borrowing has fallen for a second consecutive month, it will be important to keep close check on how this affects house prices over the summer. While consumer confidence remains relatively stable, the coming months will be key to monitor as the economy looks to hopefully strengthen.
“Across the summer, attention will also likely turn to new political leadership and what a change in prime minister could mean for the property sector. Housing remains central to economic growth and must be a priority across all nations within the UK.”
Northern Ireland and Scotland lead price growth, London and the South East lag
Northern Ireland recorded the strongest annual growth in the UK, with prices up 7.4% over the year to an average of £229,000. Scotland followed with annual growth of 3.9%, taking average prices to £223,277.
In Wales, annual growth strengthened to 0.9%, with the typical property now valued at £231,142.
Within England, growth remained concentrated in the north. The North East recorded annual growth of 2.8%, taking average prices to £181,133, while the North West saw growth of 2.4%, with average prices reaching £248,218.
Southern regions continued to see values fall. The South East recorded the steepest decline, down 2.0% year on year to £381,654, while London prices fell 1.1% to £534,831.
“The recovery is still tentative but Britain’s North-South divide is back in force,” said Jonathan Hopper (pictured right), chief executive of property search consultancy Garrington Property Finders. “Property prices are again heading in opposite directions at opposite ends of the country.
“Confidence remains tentative in most areas, and buyers’ caution and sense that they have both time and choice on their side is likely to keep national price rises modest.
“It’s too early to talk of the market bouncing back. As for the North-South divide, it never really went away and now looks likely to grow further.”
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