UK House Prices Stay Subdued for Third Consecutive Month

For the third consecutive month, UK house prices have remained subdued, indicating a stable but stagnant market trend. This continued lull in price growth reflects broader economic conditions and market dynamics. Analysts are closely monitoring the situation to understand its potential impact on both buyers and sellers in the housing market. The sustained stagnation suggests cautious market behavior amid uncertain economic factors influencing the property sector.

Boston Brand Media brings you the latest news - House prices have remained "subdued" for the third consecutive month, according to a leading lender, but recent mortgage rate reductions are sparking hopes of market improvement.

The average house price reached £288,455 in June, as reported by Halifax, down only 0.2% from £288,931 in May, with a property shortage keeping prices elevated. Annual house price growth stayed constant at 1.6%.

The latest figures from the mortgage lender, covering much of the election campaign period, indicate that house prices have stayed relatively flat for three consecutive months.

According to Nationwide, UK house prices remain unaffordable for many people.

Amanda Bryden, Halifax’s head of mortgages, stated that house prices had seen a seventh consecutive month of year-on-year growth. "This continued stability in house prices – rising by just 0.4% so far this year – reflects a market that remains subdued, though overall activity has been recovering.

"Currently, it’s the shortage of available properties, rather than buyer demand, that continues to underpin higher prices."

She also noted that mortgage affordability remains the biggest challenge for new homebuyers and those nearing the end of their mortgage deals.

However, the prospect of the Bank of England cutting interest rates in August or September has led to a series of mortgage rate reductions this week, offering some relief to buyers and borrowers and raising hopes for an improved market outlook later this year.

Boston Brand Media also found that earlier this week, Barclays announced a cut to some of its fixed-rate mortgages by 0.27 percentage points, while Halifax reduced rates by 0.19 points and Santander by 0.16 points on Thursday.

Leeds Building Society also announced that it would reduce its residential mortgage rates by up to 0.15 percentage points starting Monday.

Mark Harris, CEO of the mortgage broker SPF Private Clients, said: “With the big five lenders – Barclays, HSBC, Santander, Halifax, and NatWest – reducing their mortgage rates this week, lenders continue to compete for business during the summer sales.”

He added, “Those lenders who haven’t yet repriced are likely to follow suit, provided service levels allow, which is welcome news for borrowers under financial pressure.”

Rightmove's analysis, published last month, found that monthly mortgage costs for first-time buyers had risen by more than 60% since the 2019 general election, with the average monthly mortgage payment for a typical first-time buyer now at £1,075, up from £667 in 2019.

Bryden expects mortgage costs to ease gradually through a combination of lower interest rates, rising incomes, and more restrained house price growth.

London remains the most expensive area for property in the country, with the average home in the capital costing £536,306, up 0.9% year-on-year in June.

The south-east of England is the second most expensive area, with an average house price of £385,056, while the north-east is the least expensive, with properties averaging £172,308.

Northern Ireland saw the highest property price growth in the UK, with average prices at £192,457, a 4% increase year-on-year.

Bryden noted, “While in the short term the housing market is delicately balanced and sensitive to the pace of change in the base rate, based on our current expectations, property prices are likely to rise modestly through the rest of this year and into 2025.”

Jeremy Leaf, a north London estate agent and former residential chair of the Royal Institution of Chartered Surveyors, said, “The election added to the property market’s nervousness, but slower-than-expected declines in mortgage rates had a greater impact.

“We’re hearing from our offices and on the ground that most buyers and sellers have paused their moves, so we expect the resilient recovery in activity to continue.”

He added, “Looking forward, the rise in listings should keep prices stable, and the arrival of a new government will add certainty.”

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Source: theguardian‍