House prices hold steady in June: Halifax

House prices have risen by just 0.4% so far this year.

Related topics:  Finance News,  House prices
Rozi Jones | Editor, Barcadia Media Limited
5th July 2024
balancing scales with a house and a percentage sign
"For now it’s the shortage of available properties, rather than demand from buyers, that continues to underpin higher prices."
- Amanda Bryden, head of mortgages at Halifax

Average UK house prices were largely flat in June, down by just -0.2% on a monthly basis, while the annual rate of house price growth was unchanged from last month at 1.6%, the latest Halifax house price index shows.

A typical UK home now costs £288,455, compared to £288,931 in May.

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.

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 increased by 1.6%, while in Wales, house prices grew annually by 2.7%.

Eastern England was the only region or nation across the UK to register a decline in house prices over the last year, 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.

Amanda Bryden, head of mortgages at 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.”

Alice Haine, personal finance analyst at Bestinvest, commented: “UK house prices edged down slightly in June, falling by just 0.2% following a similar decline in May as the market remained flat in the face of consistently high borrowing costs. Annual house price growth was also unchanged on the previous month, reflecting the sector's more subdued mood.

"With Britons waking up to a new Labour Government today, many may wonder whether their landslide victory will inject some momentum into the UK property market. A stable political environment can potentially deliver a confidence boost to the housing market, particularly one that has struggled over the past year with high borrowing costs and a dearth of available and affordable stock.

“Several major lenders have already begun trimming their headline deals and while a UK rate reduction would improve mortgage rates for new borrowers and those on trackers, it won’t ease the concerns for those locked into fixed rate deals with some time left to run. Those on long-term fixes taken out before or during the early stages of the BoE’s rate-hiking cycle will still face higher repayments when they eventually come to refinance."

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Affordability continues to be an issue for borrowers with flat house prices suggesting that buyers are not getting carried away and buying at any price.

"With the big five lenders – Barclays, HSBC, Santander, Halifax and NatWest – reducing their mortgage rates this week, lenders continue to jostle for business as they ramp up the summer sales. Those lenders who haven’t yet repriced are likely to follow suit, as long as service levels allow, which is welcome news for hard-pressed borrowers.

“Even though Swap rates, which underpin the pricing of fixed-rate mortgages, are not showing a consistent downwards trend, the need to generate more business seems to be motivating lenders to tweak their rates.

“The slowdown in activity and muted transaction levels are not so much down to the general election as the lack of action from the Bank of England when it comes to cutting rates. With the election now out of the way and inflation at its 2 per cent target, the stage is set for the first rate reduction in August."

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