House prices remain stagnant amid drop in swap rates – Lloyds
House prices showed an effective 0% change in June, averaging at £299,253.
Lloyds’ latest house price index (HPI) showed a marginal drop in house prices from £299,396 in June to £299,253 in July – a mere nominal change, effectively at 0%.
Annually, this represented a 0.1% growth in house prices.
This was the slowest rate of house price inflation since November 2023.
In England, stronger price growth remained concentrated in Northern regions. The North East recorded annual growth of 2.8%, taking the average property price to £182,488, while the North West saw prices rise 2.1% to £247,836.
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Concerns about a faltering London market
The weakest regional markets remain in Southern England. The South East saw prices fall 2% year-on-year to £381,146.
Greater London recorded a 1.3% decline to £533,930.
Amy Reynolds, head of sales at Antony Roberts, said: “London needs more support from government, not less. This is where the money is generated”.
“It’s becoming harder to make the case that London is aspirational anymore, and that shift in sentiment matters for the market – buyers are voting with their feet,” especially after an exodus of over 400,000 people from the capital last year, said Reynolds.
Market at the mercy of global conflict
The war in the Middle East has been the predominant discourse in recent months as the housing market has remained volatile.
Karen Noye, mortgage expert at Quilter, commented: “The housing market is increasingly at the mercy of events far beyond the UK housing sector itself. From geopolitical tensions in the Middle East to shifting expectations for interest rates, buyers are having to factor global uncertainty into what is often the biggest financial decision of their lives.”
It is placated somewhat by the summer months being a generally quiet time for homebuying and selling.
“This is traditionally a quieter period for the housing market. During the summer months, many households swap house hunting for holidays, naturally softening activity levels and taking some momentum out of price growth,” said Noye.
Onus remains on sellers
Sarah Coles, head of personal finance at AJ Bell, commented: “In softer markets, sellers will need to work harder.
“This starts with pricing realistically, but also includes looking at your home with a more critical eye, and dealing with anything that could put buyers off.”
While it may be a buyer’s market, prospective borrowers have a myriad of considerations to make.
“If you’re planning a move, it makes sense to build your savings to put yourself in a better position to roll with the punches in the property market,” said Coles.
Mark Harris, chief executive of SPF Private Clients, said: “In recent days, a drop-off in swap rates, which underpin the pricing of fixed rate mortgages, has enabled Nationwide, Halifax and Barclays to announce cuts in their mortgage rates, which had risen on the back of higher funding rates.”
Mortgage rates have seen a push upward in recent weeks – but major lenders haven’t shied away from U-turns.
