Experts encouraged by figures but warn no sign of house price boom
Experts have welcomed the first house price increase in four months but have warned caution over the coming months.
The latest Lloyds House Price Index showed that house prices rose 0.2% in June, after a 0.2% fall in May, while annual growth rose 0.6%, from 0.5% in May. The average property price now stands at £299,330 compared with £298,812 in May.
Regionally, Northern Ireland continues to record the UK’s strongest annual growth at 7.4% to £229,000, followed by Scotland, up 3.9%, with an average price of £223,277. In Wales growth is up 0.9% to £231,142.
In England, stronger price growth remains concentrated in northern regions, up 2.8% in the North East and 2.4% in the North West, while the South East was down 2.0% and London down 1.1%.
First-time buyer price growth
Meanwhile, for first-time buyers, annual price growth increased to 0.8% in June from 0.3% in May, with the average first-time buyer property now costing £240,433.
Amanda Bryden, head of mortgages at Lloyds, said: “Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations. While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move.
Nathan Emerson, CEO of Propertymark, said: “When taking a broad view of the property market and the wider economy, it is encouraging to see average UK house prices deliver growth, both month on month and year on year.
“However, with Bank of England data showing mortgage borrowing has fallen for a second consecutive month, it will be important to keep close check on how this affects house prices over the summer.”
Jonathan Hopper, CEO of Garrington Property Finders, said: “Britain’s North-South divide is back in force. In southern areas a glut of supply is attracting too few serious buyers, and this is steadily driving prices down. Buyers are often able to ask for, and get, reductions on the asking price. In the north the forces of supply and demand are more balanced, and this is helping prices to rise steadily.”
Meanwhile, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said other factors were also at play. “We are finding reluctance of some owners to recognise the new market realities of reduced confidence and difficulty of generating offers is holding back transactions. Now, political uncertainty is providing another excuse for buyers and sellers to sit on their hands.”
Emeritus Professor Joe Nellis, economic adviser at MHA, said the housing market is likely to strengthen only modestly in the second half of 2026, with transaction volumes picking up more quickly than prices as competition among mortgage lenders supports demand.
“Over the year as a whole, prices are expected to post low single-digit growth,” he said. “Much depends on the direction of the UK economy – and more specifically, monetary policy. What is clear is that there is no sign of a house price boom on the horizon.”