House prices in the UK crept higher in June as mortgage rates eased from the sharp spike that followed the outbreak of the Iran war, according to Lloyds Banking Group. The average property price rose by 0.2 percent to £299,330, reversing a 0.2 percent decline in May. It was the first monthly increase in four months, and Lloyds said lower borrowing costs were the main reason.
Inflation fears and expectations of higher interest rates driven by the Middle East conflict had weighed on the market since early spring. But lenders have started cutting rates in recent weeks. Nationwide Building Society chopped its home loan prices on two separate occasions last month, as US‑Iran peace talks cooled some of those inflation concerns.
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Lloyds noted the annual rate of price growth edged up to 0.6 percent. A sharper 0.8 percent jump in prices paid by first‑time buyers signaled that demand is recovering.
Easing mortgage rates offer some relief for buyers
Amanda Bryden, head of mortgages at Lloyds, said: “While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move.” Mortgage approval numbers fell in May, but Lloyds explained that was a delayed reaction to the earlier rate spike. Activity should pick up as rates fall further, it added.
“Looking ahead, we expect the housing market to continue moving at a measured pace. Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor,” Bryden added.
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Southern England lags as northern markets drive gains
Regional splits are sharpening. Property markets in the south of England remained weak. Average prices in the South East fell 2 percent to £381,654, while London prices dropped 1.1 percent to £534,831. In contrast, northern regions dragged up the national average. Prices in the North East jumped 2.8 percent to £181,133, and in the North West they rose 2.4 percent to £248,218.
Nathan Emerson, chief executive of estate agent trade body Propertymark, said: “Across the summer, attention will also likely turn to new political leadership and what a change in prime minister could mean for the property sector. Housing remains central to economic growth and must be a priority across all nations within the UK.”
