Stability in average house prices is a sign of a “steady” housing market said Lloyds in their latest house price index.
The rebranded index, formerly the Halifax House Price Index, suggests sensitivity to borrowing costs remains in the property market, with the latest industry data, showing a “modest increase” in both mortgage approvals and completed transactions in June, following a bigger dip in May. “While housing demand remains broadly steady, activity continues to respond quickly to changes in mortgage rates” said Amanda Bryden, Head of Mortgages at Lloyds.
According to HMRC UK residential transactions increased by +0.2% to 98,700 in June 2026 (seasonally adjusted). In the three months to June, transactions were 1.5% lower than in the preceding three months, but 2.5% above June 2025 levels Bank of England data shows mortgage approvals for house purchase rose to 58,200 in June 2026, up +2.9% month-on-month, although approvals remained -10.0% lower than a year earlier.
Bryden added: “Average house prices have remained relatively stable for almost two years, moving within a narrow range over that period and sitting just +0.5% higher than they were in November 2024. That trend has persisted even as buyers and sellers have faced a more uncertain economic backdrop this year.”
Commentators have welcome the “calming effect” of consistent Bank of England decisions to hold base rate with Jason Tebb, President of OnTheMarket saying: “The steady interest rate environment, with the Bank of England holding base rate at five consecutive meetings, is providing a welcome calming effect. Affordability concerns remain, particularly as mortgage lenders have increased their rates in recent weeks, but borrowers on the whole are adapting to shifting market conditions.
There are reasons for “cautious optimism”, according to Iain McKenzie, CEO of The Guild of Property Professionals: “Wage growth has remained stronger than many expected, inflation eased during June, and mortgage approvals have picked up, all of which are helping to support buyer confidence. At the same time, transaction levels have stabilised and sales agreed are holding broadly in line with previous years, underlining that demand hasn’t disappeared, it’s simply become more measured.
“That said, affordability pressures haven’t gone away. With the Bank of England expected to keep interest rates higher for longer amid ongoing geopolitical uncertainty, buyers remain price-sensitive and are taking a considered approach. Sellers who recognise today’s market conditions and price competitively from day one are continuing to achieve successful sales, while those chasing yesterday’s prices are finding their properties linger on the market.”
Both McKenzie and Nicky Stevenson, Managing Director of Fine & Country are optimistic demand is steady, if unspectacular: “The latest house price figures show a market that has found a degree of stability. Buyers remain active, mortgage approvals are improving, and transactions have edged higher year-on-year, demonstrating that there is still a healthy level of underlying demand.”
“However, the market has become increasingly selective. With more properties coming onto the market, buyers have greater choice and stronger negotiating power than they have enjoyed for some time. That places an even greater emphasis on accurate pricing, as homes launched at realistic values continue to attract interest and sell, while those that come to market overpriced often require reductions and spend significantly longer waiting for a buyer.
“Looking ahead, ongoing geopolitical tensions, inflation risks and the prospect of interest rates remaining elevated mean we expect the market to continue progressing steadily rather than spectacularly. The fundamentals remain supportive, but success for sellers will continue to depend on aligning expectations with current market realities.”
Anthony Codling, Managing Director, Equity Research. RBC Capital Markets said: “The narrative here is one of suspended animation: prices are neither falling sharply nor rising with any conviction, trapped in a narrow two-year range by the twin vices of stretched affordability and mortgage rates that refuse to fall far enough for long enough. Geopolitical ructions in the Middle East have given lenders an excuse to nudge rates back up just as they had begun to ease, reinforcing the ceiling on buyer appetite. Transaction volumes remain well below year-ago levels and RICS survey data continues to paint a subdued picture of demand. The market is not in crisis, but the green shoots that flickered briefly in early 2026 have wilted. For UK housebuilders, stable prices are better than falling ones, but at these activity levels, volume recovery remains elusive and earnings upgrade momentum is hard to sustain. We see a modestly cautious backdrop for the sector.”
Concluding the house price index Bryden indicates the lender is preparing for a solid remainder of 2026: ““Looking ahead, we expect market activity and house prices to remain relatively stable over the remainder of the year. Developments will be shaped by both how mortgage rates respond to the outlook for inflation and wider household confidence.”
