The UK's stuttering property market has finally registered its first monthly price rise since the Iran war began, with average house values edging up 0.2% to £299,330 in June, according to Lloyds' latest index. This modest rebound follows a four-month period marked by economic uncertainty and stagnation, including a 0.2% drop in May.
The surprise US-Israeli missile strikes on Tehran on 28th February sent shockwaves through the economy, initially driving up oil prices and fuelling inflation concerns. However, with Brent crude now trading at near pre-war levels around $72 a barrel and shipping back on track in the Strait of Hormuz, market expectations have shifted, and mortgage rates have begun to ease.
Amanda Bryden, Head of Mortgages at Lloyds, points out that recent price trends are influenced by broader economic conditions, including global inflation and interest rate forecasts. Despite affordability remaining a major hurdle for many potential buyers, the relaxation in mortgage rates has given some hopefuls an opportunity to move or enter the market, as reflected in robust demand from first-time buyers.
First-time buyer prices have increased annually by 0.8% to £240,433 on average. Regionally, Northern Ireland leads the charge with a 7.4% annual house price growth, taking the average value to £229,000. Scotland follows closely with a 3.9% rise, reaching an average of £223,277.
Wales has strengthened its annual growth rate to 0.9%, with typical home values at £231,142. In England, northern regions are driving stronger price growth, with the North East up 2.8% to £181,133 and the North West increasing by 2.4% to £248,218.
Conversely, property values in southern England continue to decline, with the South East experiencing a 2% year-on-year drop to £381,654 and London's average value decreasing by 1.1% to £534,831.