UK house prices increased in June, marking the first monthly rise since February and signalling renewed stability in the housing market despite ongoing economic uncertainty.
According to the latest Lloyds House Price Index, the average UK property was valued at £299,330 in June, representing a 0.2% monthly increase after a 0.2% fall in May. Annual house price growth also edged up slightly, rising from 0.5% to 0.6%.
Although prices remain below the levels recorded at the beginning of the year, June’s figures suggest the market is beginning to recover following several months of weaker activity.
Economic uncertainty continues to influence the market
Amanda Bryden, Head of Mortgages at Lloyds, said recent movements in house prices continue to reflect broader economic uncertainty, including the effect of global events on inflation and expectations around future interest rates.
She noted that while affordability remains a challenge for many prospective buyers, mortgage rates have eased compared with recent highs, providing some encouragement for those looking to enter or move within the property market.
Global events impacted market confidence
The recent conflict involving Iran created uncertainty across global financial markets, driving oil prices higher and increasing inflationary pressures. As a result, expectations that the Bank of England would reduce interest rates were temporarily replaced by concerns that rates could remain higher for longer.
Since then, oil prices have largely returned to pre-conflict levels, helping to improve sentiment. However, geopolitical tensions remain, meaning markets continue to monitor developments closely.
First-time buyer demand remains resilient
Lloyds reported that activity among first-time buyers has remained relatively strong despite affordability pressures.
Annual house price growth for first-time buyers increased from 0.3% in May to 0.8% in June, with the average purchase price reaching £240,433. This suggests demand from new buyers has continued even in a challenging lending environment.
Looking ahead, Bryden expects the housing market to continue growing at a steady pace. She believes lower mortgage rates should support buyer demand, although affordability will remain an important factor influencing market activity. Continued progress in reducing inflation and improving consumer confidence is also expected to play a key role in future house price movements.
Northern regions continue to outperform
Regional figures show that Northern Ireland recorded the strongest annual house price growth across the UK, with average prices rising 7.4% over the past year to £229,000.
Scotland followed with annual growth of 3.9%, taking the average property value to £223,277, while Wales recorded annual growth of 0.9%, with average prices reaching £231,142.
Within England, the strongest growth continued to come from northern regions. House prices in the North East increased by 2.8% over the year, while the North West saw annual growth of 2.4%.
Southern England continues to lag
By contrast, property values continued to decline across parts of southern England.
The South East recorded the largest annual fall, with prices dropping 2% to an average of £381,654. London also saw prices decrease, with average property values falling 1.1% year-on-year to £534,831.
While regional differences remain significant, the latest figures indicate that the UK housing market is showing signs of resilience, supported by easing mortgage rates and improving buyer confidence despite ongoing economic and geopolitical uncertainty.
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