The newly renamed Lloyds House Price Index, formerly Halifax, reveals a slight increase in house prices in June, up by 0.2% after falling by the same amount in May.
The small but significant shift offers encouragement to buyers, Lloyds head of mortgages Amanda Bryden said, and suggests demand remains resilient.
“Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations,” she explained. “While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move.”
She added: “For first-time buyers, annual price growth increased to 0.8% in June, from 0.3% in May, with the average first-time buyer property now costing £240,433, suggesting demand remains resilient.”
Lower borrowing costs will provide some support for demand, Bryden said, but the outlook will depend on an improvement in household confidence.
For property commentators, that improvement hinges on domestic politics. While speculation is rife that Andy Burnham, expected to be in office as prime minister within the month, may make changes to property taxes, there are no verifiable developments to support market recovery.
“Speculation about tax undermines willingness to take on debt,” north London estate agent and former RICS residential chairman Jeremy Leaf said. “So the sooner Andy Burnham is confirmed as prime minister and we know where costs are likely to be changed the better.”
Gareth Lewis, deputy CEO of specialist lender MT Finance, said the market urgently needs government stimulus. “Removing stamp duty would give a significant boost to the number of housing market transactions – after the deposit, stamp duty is the biggest outlay when buying a home,” he pointed out.
“In terms of the land value tax that has been suggested as a replacement, an annual cost is something people would get used to over time whereas a one-off hit, like stamp duty, is much harder to budget for.”
According to Jason Tebb, president of OnTheMarket, borrowers are adapting to shifting conditions and those who need to move will continue to buy and sell homes.
He explained: “Political uncertainty and challenging economic conditions continue to form a backdrop, but the resilience of the market and the needs-based buyers and sellers who have no choice but to proceed, is evident.
“With average house prices edging upwards, buyers and sellers are adopting a pragmatic outlook and adjusting expectations. For those hoping to get on the ladder for the first time, this is a more encouraging market to work with, free from boom and bust, with prices which are not running away with themselves and pricing would-be buyers out further.”
Propertymark CEO Nathan Emerson said Lloyds’ figures are encouraging, but activity in the coming months will be crucial.
He said: “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.
“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.”
For Anthony Codling managing director, equity research, RBC Capital Markets, the “modest but meaningful” increase is important. “Annual growth, at just 0.6%, is hardly the stuff of headlines, but the direction of travel matters more than the pace right now,” he said.
“After a choppy few months shaped by global uncertainty, tariff-driven inflation anxiety and the resulting rate volatility, June’s data offers a tentative but welcome signal that the market is finding its footing.
“Affordability remains stretched, and activity data from the Bank of England and RICS points to a buyer pool that is hesitant rather than energised. But with mortgage rates pulling back from their recent peaks and the first-time buyer market showing genuine resilience, the seeds of a more confident second half to 2026 are being sown.”
Lloyds’ Bryden also expects a steady recovery. She explained: “Looking ahead, we expect the market to continue moving at a measured pace. Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor.”
Regionally, Northern Ireland continues to record strongest annual growth, with prices up 7.4% to £229,000. Scotland increased by 3.9% to £223,277, with Wales up 0.9% to £231,142.
In England, strongest growth remains concentrated in the north, with prices up 2.8% to £181,133 in the North East, and rising 2.4% to £248,218 in the North West.
The southern market continues to decline, with a drop of 2% in the South East to £381,654 and a 1.1% decrease in London – although properties are still significantly higher than the rest of the UK with an average price of £534,831.
