Key facts
- UK house prices were flat in July, with the average property costing £299,253.
- Annual house price growth was 0.1%, the weakest rate since November 2023.
- Higher mortgage rates and economic uncertainty are impacting buyer affordability.
- Northern Ireland was the best performing region with 7.4% annual growth.
- Greater London and the south-east saw price declines.
UK house prices showed minimal change in July, with the average property value standing at £299,253, a marginal decrease of £143 from June according to Lloyds Bank's monthly index. The annual growth rate has slowed to 0.1%, marking the weakest performance since November 2023.
Amanda Bryden, head of mortgages at Lloyds, noted that affordability challenges, exacerbated by rising mortgage rates influenced by Middle East tensions and inflation fears, are significantly impacting prospective buyers. She anticipates market activity and prices will remain relatively stable for the rest of the year, contingent on inflation outlook and consumer confidence.
Analysts describe the current market as being in a state of 'suspended animation,' with prices neither experiencing sharp declines nor substantial increases. This stagnation is attributed to the dual pressures of stretched affordability and mortgage rates that have not fallen sufficiently to stimulate robust activity.
Regionally, Northern Ireland led performance with a 7.4% annual price increase. Scotland saw 3.6% growth, and Wales experienced 1.6% growth. In England, the North East and North West recorded modest annual gains of 2.8% and 2.1% respectively. Conversely, the South East and Greater London experienced price declines of 2% and 1.3% respectively, highlighting a widening north-south property divide.
Nicholas Finn, managing director at Garrington Property Finders, observed that a surplus of supply in southern England is meeting limited buyer interest, driving prices down. In contrast, more balanced supply and demand dynamics, coupled with positive sentiment surrounding investment and job creation in northern areas, are supporting price growth there.