House Prices Climb for Fourth Month

House prices saw their fourth straight monthly increase in June, signalling renewed momentum in the market following eight months of annual declines. According to the Office for National Statistics (ONS), the average home price rose by 2.7%, bringing the typical cost of a home to £288,000.

This rise matches the increase recorded in May and marks the fourth consecutive month of annual price gains. In England, the average house price climbed to £305,000, a 2.4% rise compared to the previous year. In Wales, prices rose by 1.8%, bringing the average home cost to £216,000.

Scotland saw a more substantial increase, with average property prices reaching £192,000, up 4.3% from a year earlier. Meanwhile, Northern Ireland recorded the highest regional growth, with average prices rising by 6.4% year-on-year to £185,000 between April and June.

Market experts predict continued recovery this year, buoyed by the Bank of England’s recent interest rate cut the first since 2020. The rate reduction from 5.25% to 5% has led to a wave of mortgage rate cuts, with most major banks now offering deals below 4%.  Sara Palmer, a broker at The Mortgage Lender, noted that the summer months traditionally see high levels of activity in the property market, and this is reflected in the slight uptick in June house prices.

She also pointed out growing optimism among buyers and sellers, driven by the general election and the recent interest rate cut.

However, the rise in inflation for the year to June its first increase since December 2023 could dampen buyer confidence as uncertainty looms over further Bank Rate cuts. Jeremy Leaf, former chairman of the Royal Institution of Chartered Surveyors, remarked that while the slight rise in inflation may not derail the interest rate reduction strategy, it could slow the market’s pace, leading it to stabilise at a new level.

Meanwhile, private rents across the UK surged by 8.6% in the year to July, with the average rent reaching £1,319. This increase remained consistent with the rise recorded in June and was just below the record annual jump of 9.2% seen in March. In London, rent inflation hit 9.7% in July, with the average rental cost reaching £2,114.