Lloyds Bank has revealed a modest decrease in average property prices for July, with figures showing a £143 drop. This follows a 0.2 per cent rise seen in June, positioning the average house price at £299,253 compared to £299,396 the previous month.
The annual growth rate has slowed notably, registering a 0.1 per cent increase - the slowest pace of house price inflation since November 2023. Amanda Bryden, Head of Mortgages at Lloyds Bank, commented on the steady market conditions:
“The UK housing market remained steady in July, with the average property price effectively unchanged over the month, following a slight rise of 0.2% in June.
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At £299,253, the average house price is now 0.1% higher than a year ago, the slowest rate of annual growth since November 2023.
More broadly, 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.”
Ms Bryden noted that this stability in house prices was somewhat unexpected considering the economic uncertainties prompted by recent global events, particularly the conflict in the Middle East. She added:
“That trend has persisted even as buyers and sellers have faced a more uncertain economic backdrop this year.
Affordability challenges continue to affect many prospective buyers. Moreover, following recent Middle East developments, mortgage rates have risen slightly after easing earlier in the summer.
Data reflecting borrowing sensitivities indicate a modest increase in mortgage approvals and completed transactions in June, rebounding from a larger dip experienced in May.
While overall housing demand remains steady, market activity continues to respond sensitively to shifts in mortgage rates.
Looking forward, we anticipate that both house prices and market activity will remain relatively stable for the rest of the year. These outcomes will largely depend on the trajectory of mortgage rates amidst inflation outlooks and the confidence levels of households.”
This assessment suggests that despite external pressures, the UK housing market, including areas such as Birmingham where Lloyds Bank operates, is maintaining a cautious balance amid ongoing economic challenges.