July 2, 2024 3:54 pm

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Nikka Sulton

Despite facing high mortgage rates, UK house prices continued their upward trend in June, according to Nationwide. The annual growth rate saw a slight uptick from 1.3% in May to 1.5% in June 2024.

In specific figures, the average house price rose to £266,604 in June, up from £264,249 the previous month. This increase signals a gradual recovery towards pre-pandemic levels, although prices still remain approximately 3% below the peak recorded in summer 2022.

The current market dynamics highlight the dominance of cash transactions due to elevated borrowing costs. Cash purchases were notably higher, surpassing pre-pandemic levels by around 5%. Meanwhile, overall transaction volumes saw a decline of approximately 15% compared to 2019 levels. Mortgage-dependent transactions were particularly affected, experiencing a drop of nearly 25%, as reported by Nationwide.

Despite these challenges, the housing market continues to show resilience and gradual recovery, reflecting ongoing adjustments in response to economic conditions and borrowing constraints.


Source: Yahoo! News

UK house prices continued to rise in June despite high mortgage rates, marking an annual growth increase from 1.3% in May to 1.5%, reported by Nationwide.

The average house price climbed to £266,604 in June 2024, up from £264,249 the previous month. While approaching historic highs, prices remain approximately 3% lower than their peak in summer 2022.

In the current market, cash transactions have surged by about 5% compared to pre-pandemic levels, underscoring the dominance of cash buyers amidst costly borrowing conditions. However, overall transaction volumes dipped by around 15% from 2019 levels, with mortgage-related transactions declining nearly 25%, according to Nationwide.

Despite inflation concerns at the Bank of England, which saw a recent reading hitting its 2% target in June, interest rates remain at 5.25%, their highest in 16 years. Discussions about a potential rate cut in the summer persist as wage growth continues to drive price increases across the economy.

Robert Gardner, Nationwide’s chief economist, noted, “While earnings have outpaced house price growth in recent years, higher mortgage rates, still well above post-pandemic lows of 2021, have offset these gains.”

“For example, the interest rate on a five-year fixed rate mortgage for a borrower with a 25% deposit was 1.3% in late 2021, but in recent months this has been nearer to 4.7%.”

As a result, housing affordability is still stretched, Gardner noted. “Today, a borrower earning the average UK income buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 37% of take-home pay — well above the long run average of 30%.”

Source: Yahoo! News



The announcement of the general election noticeably dampened housing demand in early June, according to Emma Jones, managing director at mortgage broker When The Bank Says No. Many prospective buyers were diverted by the political debates, causing a temporary slowdown in property searches on platforms like Rightmove (RMV.L). However, towards the end of the month, as several lenders began to lower mortgage rates, the market regained its momentum, seeing a sharp uptick in demand.

Regionally, Northern Ireland stood out with the highest annual growth in house prices, rising by 4.1% compared to the previous year. In contrast, East Anglia recorded the weakest performance, with prices declining by 1.8% over the same period.

The fluctuation in housing market dynamics reflects broader economic trends and consumer sentiment amid ongoing adjustments in mortgage rates and political uncertainties. As market watchers await potential shifts in housing policies post-election, these regional disparities in price movements highlight the varied impacts of economic factors across different parts of the UK.


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