Lead

New data on UK house prices for June 2024 present contrasting pictures of the market's health, depending on which major index is consulted. Nationwide reported that the average price of a typical UK home edged down to £277,484 last month from £278,024 in May, marking a second consecutive month of stalled growth. In contrast, Lloyds – whose index was previously known as the Halifax HPI – recorded a 0.2% month-on-month increase, bringing the typical property to £299,330, the first monthly gain since February.

The divergent readings come against a backdrop of a four-month war that began with US-Israeli missile strikes on Tehran on 28 February, and a fragile ceasefire now in place. Both lenders noted the influence of global events on inflation and interest rate expectations, though they drew different conclusions about the market's trajectory.

Coverage comparison

According to Nationwide, house price growth stalled for a second consecutive month in June, with a 0.6% month-on-month fall recorded in May. Economists had forecast a small monthly rise of 0.1% for June, but the data showed the average price dipping to £277,484 from £278,024 the previous month. On an annual basis, prices were still up 2.2% in June, accelerating from 1.7% in May.

The Lloyds index tells a more optimistic story: prices rose 0.2% month-on-month in June, following a 0.2% decline in May. The annual growth rate edged higher to 0.6% from 0.5%. June's rise was the first monthly gain since February, when prices increased 0.3% to £301,051. Prices remain below both that February peak and January's figure of £300,283.

Amanda Bryden, head of mortgages at Lloyds, said: "Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations." She added that while affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, "offering some encouragement to those considering a move."

Nationwide's data also revealed regional divergences within a picture of overall annual increases across all UK regions in the second quarter. Northern Ireland led with annual growth of 8.6%, while Scotland and Wales both recorded 3.5% growth, and London edged up 1.6% year-on-year.

Lloyds painted a more mixed regional picture. Northern Ireland saw annual growth of 7.4% with an average price of £229,000, and Scotland 3.9% to £223,277. But Wales' growth was a more modest 0.9%, with a typical home value of £231,142. London average property values fell by 1.1% year-on-year to £534,831, and the South East led regional declines with a 2% drop to £381,654. The North East and North West saw the strongest growth at 2.8% (£181,133) and 2.4% (£248,218) respectively.

Key claims

  • Nationwide reports the average UK house price at £277,484 in June, down from £278,024 in May, with a 0.6% month-on-month fall in May.
  • Lloyds reports the average price at £299,330 in June, up 0.2% month-on-month, the first gain since February when prices peaked at £301,051.
  • Annual growth according to Nationwide was 2.2% in June, up from 1.7% in May; according to Lloyds, it was 0.6%, up from 0.5%.
  • Mortgage rates remain elevated: the average two-year fixed rate stood at 5.53% on Tuesday, up from 4.83% at the start of March; the five-year fixed rate was also 5.53%, up from 4.95%.
  • For first-time buyers, Lloyds reports annual price growth of 0.8% in June, with the average first-time buyer property costing £240,433.
  • Following the Nationwide report, shares in housebuilders fell: Barratt Redrow down 1.6%, Persimmon down 0.5%, and Berkeley down 1.4% in early trading on Wednesday.
  • Brent crude traded at about $72 a barrel on Tuesday, up 1.1%, down from a peak of more than $120 earlier in the year.
  • The Strait of Hormuz has reopened, allowing previously stranded tankers to pass, though the situation remains shaky. Iran's military fired at least two missiles at commercial ships transiting the strait on Monday night, according to two US officials who spoke to Axios.
Market commentators offered a cautious outlook. Amy Reynolds, head of sales at London estate agency Antony Roberts, said: "There is the familiar pre-summer push from families wanting to be settled before the new school year, but the mood is steady and selective rather than booming or stalling." She expected "a quieter, price-sensitive summer, with activity firming again in the autumn once buyers have more clarity on rates and the geopolitical noise has died down."

Gareth Lewis, deputy chief executive of specialist lender MT Finance, said: "Nationwide's figures reflect a softening housing market. We are seeing valuers cautious on value while buyers are looking for a steal and prepared to negotiate hard on price."

Looking ahead, Amanda Bryden said Lloyds expects "the housing market to continue moving at a measured pace" and that "lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor." Nationwide's chief economist Robert Gardner noted that if the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than previously anticipated.