The average UK house price flatlined in July as mortgage rates edged higher amid global economic uncertainty, according to new figures from the Lloyds house price index.
Property values reported no growth compared with the previous month, slowing from 0.2% growth in June. The average property value in July was £299,253, up 0.1% from a year earlier, the weakest annual increase since November 2023.
Regional variations
Northern Ireland saw the strongest growth, with prices up 7.4% year on year to £231,131. Scotland saw 3.6% growth, and Wales 1.6%. In contrast, northern England's increases were offset by weakness in the south, with the south east down 2% and Greater London down 1.3%.
Market outlook
Amanda Bryden, head of mortgages at Lloyds, said the housing market “remained steady” in July. She noted that average prices have stayed within a narrow range for almost two years, sitting just 0.5% higher than in November 2024.
“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,” she added.
Lenders have been hiking rates in recent weeks, despite the base rate being held at 3.75%. The Bank of England kept rates unchanged last week but cautioned that inflation could rise by year-end due to the Iran war, signalling readiness to hike if the conflict's effects persist.
Bryden expects market activity and prices to remain stable for the rest of the year, shaped by how mortgage rates respond to inflation and household confidence.
