UK house prices flatline as mortgage rates climb amid economic uncertainty
The Bank of England kept rates steady last week, but cautioned that inflation is expected to pick up later this year.
Amanda Bryden, head of mortgages at Lloyds, said the UK housing market “remained steady” in July.
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By Isobel Anderson Morris
UK house prices remained steady last month as higher mortgage costs and continued economic uncertainty put pressure on the housing market. The average property price in July was £299,253, according to the latest Lloyds house price index, following a 0.2% rise in June. Prices were just 0.1% higher than a year earlier, marking the weakest annual growth since November 2023.Northern Ireland recorded the strongest growth across the UK, with prices rising by 7.4% over the year to £231,131. Scotland saw growth of 3.6%, while prices in Wales increased by 1.6%.In England, stronger growth in northern areas was offset by falls in the south, with prices down 2% in the south east and 1.3% in Greater London.Amanda Bryden, head of mortgages at Lloyds, said the UK housing market “remained steady” in July.Read more: House prices edge higher in July amid ‘soft’ market, says NationwideRead more: Andy Burnham's housebuilding plans are impossible without bringing down energy prices
Northern Ireland recorded the strongest growth across the UK, with prices rising by 7.4% over the year to £231,131. Scotland saw growth of 3.6%, while prices in Wales increased by 1.6%.
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She added: “Average house prices have remained relatively stable for almost two years, moving within a narrow range over that period and sitting just 0.5% higher than they were in November 2024.“That trend has persisted even as buyers and sellers have faced a more uncertain economic backdrop this year.“Affordability remains a challenge for many would-be buyers and, following recent events in the Middle East, mortgage rates have edged higher again after easing earlier in the summer.”The latest figures come as some mortgage rates have increased, despite the Bank of England keeping its base rate at 3.75%.
The latest figures come as some mortgage rates have increased, despite the Bank of England keeping its base rate at 3.75%.
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Alamy
The Bank of England held rates again last week but warned inflation was expected to rise towards the end of the year, partly due to the conflict in Iran, and said it was prepared to raise rates if its impact on prices continued.Ms Bryden added: “Looking ahead, we expect market activity and house prices to remain relatively stable over the remainder of the year.“Developments will be shaped by both how mortgage rates respond to the outlook for inflation and wider household confidence.”
