UK house prices rose for the first time since the start of the US-Iran war
House prices in the United Kingdom rose in June by 0,2% on a monthly basis, after falling by 0.2% in May.
The Lloyds property price index, previously known as the Halifax HPI, recorded its first rise after four months of declines.
Moreover, the result was slightly better than market expectations, which anticipated a price increase of 0,1%.
On an annual basis, house prices rose by 0,6%, indicating acceleration compared to 0.5% in May.
The average price of a property on the UK market is currently 299,330 GBP.
Read also: Will foreigners be stripped of social housing? The controversial idea returns. "Racist and morally wrong"
Amanda Bryden, head of mortgage credit at Lloyds Banking Group emphasised that all forecasts for UK property prices will largely depend on "further inflation decline" and "gradual improvement in household sentiment".
The above factors, however, depend on the development of the geopolitical situation in the Middle East.
"The property market slowed at the start of the year after the United States invaded Iran, which caused a sharp rise in global energy prices, reignited inflation concerns and weakened expectations about interest rates", we read in the statement.
"Before the outbreak of war it was widely expected that the Bank of England would continue to cut borrowing costs this year. Instead the bank rate was kept at 3,75%, while mortgage rates rose," added the statement.
Despite talks between the United States and Iran, and signals suggesting a de-escalation of the conflict, the market remains under pressure from the unpredictability of possible attacks.
Read also: Brutal data from the property market. Apartment sales suddenly fell by almost 20%
See also: A crack in the property market. "The year 2026 looks good for buying an apartment"
Property market restrictions are weakening? "We expect a revival"
Property buyers in the United Kingdom still face limited availability of mortgage financing.
At the same time, the decrease in loan rates relative to previous levels makes it easier for some potential buyers to decide to purchase an apartment.
"Although the latest industry data indicate that the number of new approved mortgages fell in May, it was not a surprise, given the sharp rise in interest rates recorded at the beginning of this year. We expect a revival in the market, assuming that borrowing costs will continue to fall," Amanda Bryden said.
"We expect the property market to continue to grow at a moderate pace. Lower borrowing costs should somewhat support demand, although credit availability restrictions remain a significant factor," she added.
The Bank of England kept the main interest rate unchanged at 3,75% in June.
The next BoE monetary decision will be made at the 30 July meeting.
Source: Trading Economics.
* Last week Lloyds Banking Group announced the withdrawal of the Halifax brand after 173 years. The property price index, HPI, has been published since 1983.
Read also: A crash in the property market. Those looking for a flat "should know this" - experts say
See also: Properties no longer decline. 40,000 sales contracts were cancelled in the month, apartments linger on the market for 60 days
Source: Lloyds Banking Group/Halifax.
