House price growth was flat last month, according to the latest Halifax house price index, with 0.0% growth in June following a 0.3% fall in May. Annual growth held steady at 2.5% and the average property price came in at £296,665.
Today’s house price index looks a little more positive than other indices already published which reported a fall in prices.
While the changes to stamp duty coupled with the ongoing affordability pressures are still weighing on the market, Halifax’s print suggests house prices seem to be holding up relatively well.
While the market has been resilient, there are still challenges to contend with. Prospective buyers had been clinging onto hopes that mortgage rates would continue to fall, but progress has mostly stalled for now.
The Bank of England recently reported a paltry 0.02% fall in the effective interest rate on new mortgages in May, bringing it to 4.47%.
This leaves buyers paying considerably higher rates than those enjoyed a few years ago and may price out many buyers who are now also facing elevated upfront stamp duty costs.
Meanwhile, net mortgage approvals for house purchases – an indicator of future borrowing – stayed relatively flat at 63,000 in May.
While this was the first increase since December 2024, it was only marginal, suggesting that while there has been a slight lift in buyer confidence, the market is likely to remain sluggish for some time yet.
With the summer holidays fast approaching, we could see a slowdown as trips abroad take precedence over moving home.
The market is used to a dip in momentum during this time of the year but having already had a fairly slow start to 2025, we could see this lull push house prices down a little more.
However, while we may not see activity pick up until nearer the autumn, by that time the stamp duty changes will have sunk in.
Buyers will have no choice but to adjust to the new norm if they wish to move home, and we could see the market pick up some pace as a result.
Karen Noye is mortgage expert at Quilter
