House prices largely flat in June, down by just -0.2% on a monthly basis

Average house prices largely flat in June, down by just -0.2% on a monthly basis, according to the recent Halifax House Price Index.

Annual rate of house price growth unchanged from last month at +1.6%. The typical UK home now costs £288,455 (compared to £288,931 in May). Northern Ireland also records the strongest annual house price growth in the UK
Amanda Bryden, Head of Mortgages, Halifax, said:

“UK house prices stayed relatively flat for the third successive month in June, with the slight fall equivalent to less than £500 in cash terms. On an annual basis, house prices posted a seventh consecutive month of year-on-year growth, with the average UK property value now standing at £288,455.

This continued stability in house prices – rising by just +0.4% so far this year – reflects a market that remains subdued, though overall activity has been recovering. For now it’s the shortage of available properties, rather than demand from buyers, that continues to underpin higher prices.

Mortgage affordability is still the biggest challenge facing both homebuyers and those coming to the end of fixed-term deals. This issue is likely to be eased gradually, through a combination of lower interest rates, rising incomes, and more restrained growth in house prices.

While in the short-term the housing market is delicately balanced and sensitive to the pace of change to Base Rate, based on our current expectations property prices are likely to rise modestly through the rest of this year and into 2025.”

Northern Ireland recorded the strongest property price growth of any nation or region in the UK, rising by +4.0% on an annual basis in June, up from +3.3% the previous month. The average price of a property in the country is now £192,457.

In England, the steepest rate of house price inflation is found in the North West, up by +3.8% over the last year, now standing at £231,351. House prices in Scotland also increased, with a typical property now costing £204,663, +1.6% more than the year before. In Wales, house prices grew annually by +2.7% to reach £220,197.

Eastern England was the only region or nation across the UK to register a decline in house prices over the last year, where they now average £328,747, down -0.9% in June on an annual basis. London continues to have the most expensive property prices in the UK, now averaging £536,306, up (+0.9%) compared to last year. Nathan Emerson CEO at Propertymark commented:

“The announcement of a general election last month may have caused movement in the housing market to slow down, but now that we know we have a new government with an overall working majority, Propertymark remains optimistic that house prices will start to rise during the summer months, which is a naturally busy time for the housing market.

Beforehand, it would be good for the new UK Government to clarify what its housing policies are going to be quickly, and a rumoured interest rate cut from the Bank of England hopefully becoming a reality in August would help trigger a substantial amount of confidence in the housing sector yet again.”

Iain McKenzie, CEO of The Guild of Property Professionals, commented:

“Despite high interest rates and the run up to the general election, the property market has remained resilient, which is reflected in the more optimistic house price forecasts for the remainder year. We are seeing confidence return to the market and expect it will continue to build momentum once the dust settles post election.

While historically general elections have usually pushed the pause button on market activity, with many buyers adopting a wait-and-see approach, this election seems to have bucked the trend and those who have made the decision to move have forged ahead. The sustained demand has helped to support house prices.

With headline inflation reaching its target of 2% in May, all eyes will be on the Bank of England to start cutting the rate, however, with services inflation still elevated, the Monetary Policy Committee will be careful not to cut the rate too soon. When we do see the first cut, it will alleviate some of the financial burden on many households and will inject further life into the property market.”

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