MARKET NEWS

UK house prices stalled in June, on a monthly basis, after a 0.3% fall in May, according to lender Halifax. The typical property value in June was £296,665, which was 2.5% higher than a year earlier.

Amanda Bryden, head of mortgages, Halifax, said: “The market’s resilience continues to stand out and, after a brief slowdown following the spring stamp duty changes, mortgage approvals and property transactions have both picked up, with more buyers returning to the market.

“That’s being helped by a few key factors: wages are still rising, which is easing some of the pressure on affordability, and interest rates have stabilised in recent months, giving people more confidence to plan ahead.”

Northern Ireland once again recorded the fastest pace of annual property price inflation in the UK, up by 9.6% over the past year. The typical home now costs £212,189.

Scotland recorded the next strongest annual house price growth in June, with an increase of 4.9% taking the average price to £214,891.

Property prices in Wales were up 3.9%, to an average of £229,622.

Among English regions the North West saw the highest rate of property price inflation, up 4.4% over the last year to £241,938.

The South West and London continue to see more subdued growth, with prices rising by just 0.5% and 0.6% respectively. However, the capital remains by far the most expensive part of the UK, with the average home now priced at £540,048.

Karen Noye, a mortgage expert at Quilter, said: “While the market has been resilient, there are still challenges to contend with. Prospective buyers had been clinging onto hopes that mortgage rates would continue to fall, but progress has mostly stalled for now.

"The Bank of England recently reported a paltry 0.02% fall in the effective interest rate on new mortgages in May, bringing it to 4.47%. This leaves buyers paying considerably higher rates than those enjoyed a few years ago and may price out many buyers who are now also facing elevated upfront stamp duty costs."

Separate data from Nationwide, released last week, showed house prices fell at the fastest pace since February 2023 in June.

It said the value of the average home fell 0.8% to £271,619, which was well below analyst estimates for a 0.1% increase in prices.

Capital Economics economist Ashley Webb said: “So, the big picture is that the housing market remains weak and is still struggling to regain momentum from the stamp duty-induced lull and the recent deterioration in the labour market.”

He added that its latest forecast for the Bank of England to lower interest rates from 4.25% now to % next year “suggests that lower mortgage rates may boost house prices by more than we expect in 2026”.

Halifax said lenders were “taking a more flexible approach to affordability assessments” as they attract more first-time buyers.

It said it had helped more than 1,000 first-time buyer numbers get on the property ladder over the last two months.

They were part of an extra 3,000 buyers who were able to “access a mortgage they wouldn’t have qualified for before” under new regulatory guidance.

Changes to Bank of England guidance in March meant lenders relaxed their stress tests. The government and regulators, including the Financial Conduct Authority (FCA), have been calling for lenders to relax their rules.