UK house price growth stalled for a second consecutive month in June, with the average price of a typical home edging down to £277,484 from £278,024 in May, according to Nationwide. The flatlining follows a 0.6% month-on-month fall in May, defying economists' expectations of a 0.1% rise.
Estate agents have warned of a summer slump, citing rising interest rates triggered by the war in Iran that have hurt homebuyer demand. Amy Reynolds, head of sales at Antony Roberts, described the market as 'steady and selective' rather than booming, predicting a quieter summer with activity firming in autumn once buyers have more clarity on rates.
Mortgage rates remain elevated despite a slight dip in recent weeks. The average two-year fixed rate stood at 5.53% on Tuesday, up from 4.83% in early March, while five-year fixes also averaged 5.53%, up from 4.95%. Gareth Lewis of MT Finance noted that valuers are cautious and buyers are negotiating hard on price.
The slowdown hit housebuilder shares, with Barratt Redrow falling 1.6%, Persimmon dipping 0.5%, and Berkeley dropping 1.4% in early trading on Wednesday. However, on an annual basis, house prices rose 2.2% in June, up from 1.7% in May, with all UK regions seeing growth. Northern Ireland led with an 8.6% annual increase, while London saw a modest 1.6% rise.
Nationwide chief economist Robert Gardner suggested that easing oil prices could reduce the need for further interest rate hikes, potentially lowering mortgage costs. Brent crude fell to $73 a barrel from a peak of over $120 earlier this year, and UK inflation has been lower than expected, supporting this view.
