The average UK house price hit £277,484 in June, as annual growth accelerated to 2.2% from 1.7% in May, Nationwide Building Society reported. But month-on-month prices were flat after seasonal adjustment, reflecting what Robert Gardner, Nationwide’s chief economist, called a market “softened a little” by uncertainty over Middle East tensions and rising energy prices.
“Consumer confidence and measures of housing sentiment have weakened, and mortgage approvals fell noticeably in May,” Gardner said. However, he pointed to a memorandum of understanding between Iran and the US that helped push oil prices back towards pre-conflict levels. If the energy shock continues to subside, he argued, the Bank of England may not need to raise interest rates as much as feared — a view reinforced by lower-than-expected inflation in recent months.
“UK house prices rose 2.2% annually in June but flat monthly, as Nationwide cited geopolitical uncertainty and fragile buyer confidence.”
In recent weeks, a shift in market expectations for the future path of the base rate has helped bring down the market interest rates underpinning fixed-rate mortgage pricing. “If maintained, these trends will help to restore household confidence and ease affordability constraints, paving the way for a recovery in housing market activity in the coming quarters, providing that domestic political uncertainty does not adversely impact sentiment,” Gardner added.
Estate agents reported a cautious mood. Amy Reynolds, head of sales at London-based Antony Roberts, said: “There is the familiar pre-summer push from families wanting to be settled before the new school year, but the mood is steady and selective rather than booming or stalling.”
But many buyers remain hesitant. Ian Futcher, financial planner at wealth manager Quilter, said: “Many prospective buyers are continuing to delay making any major financial commitments. Confidence remains fragile and, after a lengthy period of fluctuating mortgage rates, households are understandably reluctant to make a move until there is greater certainty over borrowing costs and the wider economic outlook.”