House prices stall as mortgage rate hikes hit property market | Personal Finance | Finance

The average UK house price flatlined last month as mortgage rates crept upwards amid global economic uncertainty, new figures have revealed.

Property values for July showed no movement compared with the previous month, easing from 0.2% growth in June, according to the monthly Lloyds house price index. Throughout the UK, the typical property value in July stood at £299,253. This meant house prices were 0.1% higher than 12 months prior, marking the weakest annual rise since November 2023.

Northern Ireland experienced the strongest price growth across the UK, with values climbing 7.4% year on year for July to £231,131.

This contrasts with 3.6% growth in Scotland and a 1.6% rise in Wales.

Meanwhile, gains in northern regions of England were counterbalanced by softness in the south, with prices in the south east falling 2% and those in Greater London dropping 1.3%.

Amanda Bryden, head of mortgages at Lloyds, said the UK housing market “remained steady” in July.

She added: “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.

“That trend has persisted even as buyers and sellers have faced a more uncertain economic backdrop this year.

“Affordability remains a challenge for many would-be buyers and, following recent events in the Middle East, mortgage rates have edged higher again after easing earlier in the summer.”

This follows lenders increasing their mortgage rates in recent weeks, despite the base rate remaining at 3.75%.

The Bank of England maintained rates at their current level again last week, but warned inflation was expected to climb by year’s end due to the Iran war and indicated it was prepared to raise rates if the conflict and its impact on prices persisted.

Ms Bryden added: “Looking ahead, we expect market activity and house prices to remain relatively stable over the remainder of the year. Developments will be shaped by both how mortgage rates respond to the outlook for inflation and wider household confidence.”