Average UK house prices increased by 3.7%, to £269,000, in the 12 months to June, up from 2.7% in the year to May, according to the latest UK House Price Index from the Land Registry.
Average house prices increased by 3.3% in England, 2.6% in Wales, and 5.9% in Scotland.
The North East was the English region with the highest house price inflation, at 7.8%, in the 12 months to June, up from 5.8% in May.
Annual inflation was lowest in London, at 0.8%, unchanged from May's figure.
Thomas Lambert, financial planner at Quilter, said: “This morning’s inflation print ticked up again, which makes the path to lower interest rates longer and reinforces the affordability squeeze. On top of that, housing supply remains thin which keeps choice limited for buyers and keeps prices sticky.
“Policy noise is adding further uncertainty. Reports this week suggest the Treasury is considering taxing gains on primary residences above a high threshold or introducing new levies on expensive homes. If these rumours do materialise at the Autumn Budget brings, transactions could seize up through the winter as sellers consider sitting on their hands hoping that another government might reverse the changes. That would risk even tighter supply and, paradoxically, could push prices higher by intensifying competition, compounding problems for first-time buyers.
“Labour making the Mortgage Guarantee Scheme permanent helps at the margin, but it does not create homes or meaningfully lower borrowing costs. Without more supply and a clearer path on rates and taxation, the housing market could face a winter of discontent that drags into next year with even more people shut out.”
Nick Leeming, chairman of Jackson-Stops, commented: “An uplift in house prices reflects a quiet but steady confidence in the market, as we continue to move further away from the turbulence of recent economic events.
“Buyers are increasingly focused on the tangible realities of today’s housing landscape, rather than being distracted by speculation or uncertainty. There remains a healthy level of housing stock available, yet competition for well-priced, quality homes is driving swift sales from committed buyers.
“While rumoured changes to stamp duty suggest the Treasury is open to bold, out-of-the-box thinking to improve market dynamics, these ideas remain speculative for now. Until concrete action is taken, they are simply words, not policy. Our recent research revealed that of the 15% of over 55s who plan to downsize would do so within the next year if stamp duty were removed or reduced on their onward purchase.
“Encouragingly, the recent cut to the base rate to 4% has brought fixed-rate mortgages comfortably below 5%, restoring buyer affordability to levels not seen since 2022. This is a welcome development, especially as millions of homeowners approach the end of their fixed rate deals this year and are considering what to do next.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, added: “Another set of housing market data which confirms buyer and seller resilience as well as a determination to keep transactions alive and negotiate hard on price. That confidence has been supported by rising wages and easing affordability pressures, although not too much reliance should be placed on these numbers as they are a little dated but are the most comprehensive of all as include mortgaged and cash transactions.
“However, the looming, almost inevitable tax rises on the horizon and increasing concerns about higher-than-expected inflation are likely to limit the depth and frequency of future interest rate cuts, which would have given a further boost to activity."
