The lender expects house prices to creep up slightly later this year and says the market has been recovering.

House prices remained mostly flat in June, with the annual rate of house price growth unchanged from May at 1.6%, according to Halifax. The lender’s latest House Price Index, published on 5 July, shows a slight monthly dip in June of 0.2%, with the average UK home now costing £288,455, compared to £288,931 in May.

‘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,’ says Amanda Bryden, Head of Mortgages at Halifax. ‘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.’

Halifax says the market has been largely subdued but points out that 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,’ adds Bryden.

Challenges for homebuyers

The lender points out that mortgage affordability is still a big challenge for homebuyers and existing homeowners who are coming to the end of fixed-rate mortgage deals. However, it adds that higher interest rates are likely to decrease and this, combined with wage growth, will help homebuyers and homeowners.

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

Regional house price differences

On a regional basis, Northern Ireland is showing the highest price growth of any nation or region in the UK, rising by 4% annually in June, up from 3.3% in May. The North West has shown the steepest rate of house price inflation, up from 3.8% over the past year, with the average property there now costing £231,351.

House prices also went up in Scotland annually by 1.6%. Eastern England was the only region to show a decline in house prices over the past year, down by 0.9% in June annually. The average property price in Eastern England is now standing at £328,747. Unsurprisingly, London remains the most expensive area in the UK, with prices standing at an average of £536,306, up by 0.9% compared to last year.

We will keep you updated on any significant changes in mortgage rates and property prices.

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