UK House Prices See Modest Rise in June, Driven by Northern Markets

UK house prices saw a slight increase of £518 in June, marking a 0.2 percent rise to an average of £299,330, according to figures from Lloyds Bank. This modest gain, however, still falls short of the £300,283 peak reached in January. Year-over-year, the average property price is up 0.6 percent compared to June 2025.

Analysts suggest the market is beginning to stabilize after a period of global uncertainty and inflation concerns. "After a choppy few months shaped by global uncertainty, tariff-driven inflation anxiety and the resulting rate volatility, June's data offers a tentative but welcome signal that the market is finding its footing," said Anthony Codling, a property analyst at RBC Capital Markets. He noted that while affordability remains a challenge and buyer activity is hesitant, falling mortgage rates and resilience in the first-time buyer market are sowing the seeds for a more confident second half of the year.

North-South Divide Widens

The overall average price increase is being significantly influenced by regional performance, with a marked divergence between the North and South of England. Southern regions, including the South East, South West, East Anglia, and Greater London, have seen average prices fall by 1 to 2 percent.

In contrast, northern areas are experiencing price growth. The North West recorded a 2.4 percent increase, bringing the average home value to £248,218, while the North East saw a 2.8 percent rise, with the typical home now valued at £181,133. Scotland also reported strong growth, with prices up 3.9 percent, and Northern Ireland continues to see a property boom with prices 7.4 percent higher than last year.

Jonathan Hopper, chief executive of buying agents Garrington Property Finders, described the situation as Britain's North-South divide being "back in force." He explained that a surplus of properties in southern areas is meeting limited buyer demand, leading to price reductions. Sellers in these regions are advised to temper their price expectations. Conversely, balanced supply and demand dynamics in the North are supporting steady price increases. Hopper suggested that a potential "Burnham premiership" could further accelerate growth in the North due to anticipated government investment and job creation.

First-Time Buyer Resilience

Despite broader market pressures, demand from first-time buyers remains robust. Amanda Bryden, head of mortgages at Lloyds, reported that annual price growth for first-time buyer properties increased to 0.8 percent in June, up from 0.3 percent in May. The average cost for a first-time buyer property is now £240,433.

Looking ahead, the housing market is expected to proceed at a measured pace. "Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor," Bryden stated. The trajectory of house prices will largely depend on continued easing of inflation and a gradual improvement in household confidence. Mortgage rates have recently increased due to inflation, impacting those looking to remortgage or purchase a home.