Editor's note: This brief was summarised by The Property AI Newsroom from a report by Guardian Property. Read the original article for full details.

UK House Prices Remain Flat in July as Affordability Pressures Persist

UK house prices were broadly stagnant in July, according to Lloyds, as higher mortgage rates and affordability challenges continued to affect prospective buyers. The average UK property cost £299,253 in July, down by £143 compared with June, and prices were just 0.1% higher than a year ago—the weakest annual growth since November 2023.

Lloyds reported that housing demand remained steady, but activity was sensitive to changes in mortgage rates. The lender noted that recent events in the Middle East had contributed to a rise in mortgage rates, further impacting affordability for buyers. As of early August, the average two-year fixed residential mortgage rate was 5.63%, and the average five-year deal was 5.67%, both higher than at the start of the year.

Regional Variations in House Prices

The Lloyds data highlighted significant regional differences in house price performance. Northern Ireland recorded the strongest annual growth, with prices up 7.4% to an average of £231,131. Scotland saw a 3.6% rise to £223,246, and Wales experienced 1.6% growth, with an average property value of £231,458.

In England, the north-east reported annual growth of 2.8% (average £182,488), and the north-west saw a 2.1% increase (average £247,836). In contrast, the south-east experienced a 2% decline to £381,146, and Greater London saw prices fall 1.3% year-on-year to an average of £533,930.

Market Outlook

Lloyds indicated that market activity and house prices are expected to remain relatively stable for the remainder of the year, with developments depending on mortgage rates, inflation, and household confidence. The report described the market as being in “suspended animation,” with prices neither rising nor falling sharply.

For letting agents and inventory clerks, these trends suggest continued regional variation in demand and pricing, with affordability and mortgage rates remaining key factors influencing the market.