Lloyds Bank customers woke up to a £518 boost in their property values this July, according to the latest house price index. The average house price now stands at £299,330, up from £298,812 in June—a modest 0.2% increase that highlights a steady housing market.
Emeritus Professor Joe Nellis, economic adviser at MHA, an accountancy and advisory firm, described the current housing market as being in a “holding phase.” Interest rate uncertainties are causing many potential buyers to delay purchases until the economic outlook becomes clearer. Halifax’s house price report echoed this sentiment, showing only a 0.6% year-on-year growth in June.
Nellis pointed out that affordability remains a major challenge. Despite a slight easing of mortgage rates as lenders compete for business, rates remain high enough to keep many buyers, especially first-time buyers, on the sidelines. Saving for larger deposits continues to be a significant hurdle, leading to steady but not strong market demand. Although lenders have introduced more flexible affordability assessments and higher loan-to-value mortgage options, homeownership remains out of reach for many.
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Amanda Bryden, Head of Mortgages at Lloyds Bank, noted the first rise in house prices in four months and highlighted the typical property price at £299,330. She attributed the broader trends to ongoing economic uncertainty, global inflationary pressures, and interest rate expectations. Bryden acknowledged that although new mortgage approvals dipped in May due to earlier rate spikes, she expects market activity to recover as borrowing costs decrease.
For first-time buyers, annual price growth increased to 0.8% in June, with the average property price for this group at £240,433—indicating sustained demand among new entrants to the market. Looking ahead, Bryden anticipates a measured pace for the housing market, driven by easing inflation and gradually improving household confidence, though affordability remains a key concern.