UK house prices hold steady in July as mortgage costs pressure buyers
Lloyds reports that UK house prices were essentially unchanged in July, with buyers facing tighter affordability due to higher mortgage rates and geopolitical uncertainty.
According to Lloyds, the UK housing market showed little movement in July, as the average property price settled at £299,253, barely above the figure from a year prior. Mortgage rates have climbed, with two-year fixed rates at 5.63% and five-year rates at 5.67%, contributing to strained buyer affordability. The bank expects market activity and prices to stay relatively stable for the rest of the year, influenced by inflation outlook and household confidence.
Regional data revealed Northern Ireland posting the highest year-on-year increase at 7.4%, while the south-east and Greater London experienced price drops of 2% and 1.3% respectively. Analysts characterize the situation as a period of "suspended animation," with prices trapped between limited affordability and stubborn mortgage rates, and comment on an increasingly pronounced north-south divide in England.
Why it matters
Stable house prices amid rising mortgage costs affect homebuyers' ability to enter the market and influence broader economic confidence.
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