"While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move"
- Amanda Bryden - Lloyds
UK house price growth edged higher in June, with prices rising by 0.2% during the month, according to the latest Lloyds House Price Index (formally Halifax HPI).
It's the first monthly increase in four months, following a 0.2% fall in May, and takes the average property price to £299,330, up from £298,812 the month before.
Annual house price growth also strengthened, climbing to 0.6% in June from 0.5% in May, even as the quarterly figure slipped to -0.4%.
Amanda Bryden, head of mortgages at Lloyds, said the uptick reflected a modest recovery after a difficult spring.
"House prices rose for the first time in four months during June, increasing by +0.2%, compared to May," said Amanda Bryden, head of mortgages at Lloyds. "The typical property now costs £299,330, while the annual rate of growth also edged higher to +0.6%."
"Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations," she noted. "While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move."
She also pointed to a slowdown in lending activity. "While latest industry data shows the number of new mortgage approvals dropped in May, this wasn't unexpected given the spike in rates seen earlier this year, and we'd expect to see activity recover assuming borrowing costs continue to fall," she explained.
First-time buyers, meanwhile, appear undeterred. "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, suggesting demand remains resilient," Bryden added.
Looking further ahead, she struck a cautious note. "We expect the housing market to continue moving at a measured pace. Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor. The outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving," she said.
Regional house price growth remains uneven
Regional house price growth continues to diverge sharply across the UK. Northern Ireland remains the standout performer, with annual growth of 7.4% taking average prices to £229,000, based on the most recent three months of mortgage transaction data.
Scotland recorded the next-highest growth, at 3.9%, lifting the average property value to £223,277, while Wales saw its own growth strengthen to 0.9%, taking the typical home there to £231,142.
England's picture is more mixed. Stronger gains remain concentrated in the north, where the North East posted annual growth of 2.8% to an average price of £181,133 and the North West recorded 2.4% growth, reaching £248,218. Southern markets tell a different story, however: the South East saw prices fall by 2.0% year-on-year to £381,654, while London recorded a 1.1% annual decline to £534,831.
Wider activity remains subdued
Broader housing market indicators point to softer conditions beneath the headline price growth:
UK residential transactions fell by 2.0% to 98,450 in May (seasonally adjusted), though on a non-seasonally adjusted basis, transactions actually rose by 7.0% over the month, according to HMRC.
Mortgage approvals for house purchases dropped by 14.9% to 56,205 in May, 10.8% lower than the same month in 2025, Bank of England data shows.
The RICS Residential Market Survey for May recorded a negative net balance of -34% for new buyer enquiries and -37% for agreed sales, though the Royal Institution of Chartered Surveyors described overall activity as stabilising after recent declines.
With borrowing costs beginning to retreat from recent highs, Lloyds suggested the market could see renewed momentum, provided inflation continues to ease and household confidence improves in the months ahead.
Industry reactions
Tom Bill, head of UK residential research at Knight Frank, said, “House prices are going sideways, and transactions are falling as a result of higher mortgage rates since the start of the Middle East conflict.
"The good news is that geopolitical risks are subsiding as both sides move gradually towards a ceasefire and mortgages are edging lower. The bad news is that domestic political risks are rising and various trial balloons about changes to property taxation are being floated for the third consecutive year, which will keep a lid on activity and prices this summer.”
Nathan Emerson, CEO of Propertymark, comments, “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 a close check on how this affects house prices over the summer.
“While consumer confidence remains relatively stable, the coming months will be key to monitor as the economy looks to hopefully strengthen.
“Across the summer, attention will also likely turn to new political leadership and what a change in prime minister could mean for the property sector. Housing remains central to economic growth and must be a priority across all nations within the UK.”
James Nightingall of HomeFinder AI says, “June was a reality check for a lot of sellers. Whilst demand is still there, most buyers are far more selective and price-sensitive than earlier in the year. House hunters are not disappearing; they are simply refusing to chase optimistic asking prices.”
Marc von Grundherr, director of Benham and Reeves, said, "The housing market has demonstrated remarkable resilience over the past year, with house prices remaining broadly stable despite ongoing economic uncertainty and affordability pressures.
"Today's figures suggest that the market is moving in a positive direction. While affordability pressures remain a challenge, buyers have adapted to the current interest rate environment and remain committed to moving when the right property becomes available.
"Greater stability in mortgage pricing has also helped improve confidence, supporting healthy levels of demand and creating a solid foundation for continued market stability and transaction activity over the months ahead.”
