House price growth steady at 1.7% in June: UK HPI

Average UK house prices increased by 1.7% in the 12 months to June, down from 1.8% in May, according to the latest UK House Price Index from the ONS and Land Registry.

The average UK house price was £288,000 in June, which is £5,000 higher than 12 months ago, but £5,000 below the recent peak in November 2022.

Average house prices increased over the 12 months by 1.9% in England, 0.6% in Wales, and 2.7% in Northern Ireland, while average Scotland house prices remained little changed.

The North East saw the highest annual percentage change of all English regions in the 12 months to June 2023 (4.7%), while London saw the lowest (negative 0.6%).

On a seasonally adjusted basis, the average UK house price increased by 0.3% in June, following a month-on-month decrease of 0.3% in May.

On a non-seasonally adjusted basis, prices increased by 0.7% in June, following a month-on-month increase of 0.2% in May.

Conor Murphy, CEO and founder of Smartr365, commented: “The latest house price data shows that there is still strong demand for UK property, despite wider economic challenges. The UK has avoided a recession and the initial signs suggest that inflation is starting to slow. New buyers are still looking to enter the market, despite a number of recent base rate rises from the Bank of England, and lenders are willing to lend, ensuring that prices in many areas remain stable.

“Although the market remains broadly healthy, the cost-of-living crisis still continues to impact buyers across the UK. Brokers need to acknowledge this, while dealing with a fast-moving market that’s still experiencing a great deal of product turnover. There is no silver bullet for these issues, but the integration of the right tech can help to both free up time for brokers and improve the overall efficiency of the mortgage process for consumers. Continuing investment in tech such as Open Banking, will create a better-functioning market for the future – something which will benefit both buyers and the advisers who support them.”

Tomer Aboody, director of property lender MT Finance, said: "Fewer transactions due to lack of confidence in recent months is reflective of the market and sentiment, with buyers and sellers sitting on their hands as they await some stability.

"Although transaction numbers might be rising, they're still half of what they were this time last year.

"With inflation heading in the right direction, helping the government's commitment to halve it by the end of the year, confidence should improve. Hopefully, an end to interest rate rises is also in sight, which will give borrowers a much-needed boost."

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "Swap rates, which underpin the pricing of fixed rate mortgages, have been much calmer in recent weeks after a period of extreme volatility, giving lenders the confidence to start reducing their mortgage rates.

"The markets reacted broadly favourably to the latest inflation data this morning, with five-year Swaps falling to 5.01% from 5.07% yesterday. If Swaps continue to move in this direction, other lenders may well reduce their mortgage rates, which will be welcome news for hard-pressed borrowers.

"While base rate is expected to peak at around 5.75-6% with another rate rise next month, there is a strong argument for the Bank of England to then pause rate rises to let the dust settle. Consecutive base rate rises have been painful; it’s time to let them take effect, rather than causing continued anxiety and distress for borrowers."