Despite slowing house price growth, the housing market remains resilient.
The UK housing market remained stable in June, with the latest figures showing average property prices holding steady. According to Halifax’s latest House Price Index, published on 7 July, house prices saw no change in June (0.0%), following a slight dip of -0.3% in May. The average UK house price now stands at £296,665, just £117 lower than last month.
Year-on-year, property prices are still up by 2.5%, although this represents a slight decrease from the 2.6% recorded in May. While the pace of growth has softened, the overall picture remains one of resilience.
What’s supporting the housing market?
Wage growth is helping to ease affordability pressures for some buyers. Interest rates have stabilised, giving borrowers more confidence. There is growing speculation of two potential base rate cuts later this year, which could further support affordability and boost demand.
‘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,’ says Amanda Bryden, Head of Mortgages at Halifax. ‘Wages are still rising, and interest rates have stabilised, giving people more confidence to plan ahead.’
Regional house price differences
Northern Ireland continues to lead the way with the most substantial annual house price growth in the UK, highlighting ongoing regional differences. It saw property prices rise by +9.6% over the previous year. The typical home there now costs £212,189.
Scotland recorded the subsequent strongest annual house price growth, increasing by 4.9% to an average of £214,891, and Wales saw prices rise by 3.9% to an average of £229,622.
The South West and London recorded more subdued growth of just 0.5% and 0.6%, respectively. However, our capital remains the most expensive area of the UK, with the average London home priced at £540,048.
Buyers returning to the market
Encouragingly, first-time buyer numbers have bounced back to pre-stamp duty change levels. Following a brief slowdown in market activity earlier in the spring, both mortgage approvals and housing transactions have increased in recent weeks.
However, affordability remains a challenge for many, and inflation continues to sit above the Bank of England’s 2% target. Despite this, the underlying signs are positive, and there is talk of further base rate cuts later this year. As always, there’s no guarantee, but we’ll keep you posted.