House prices across the UK increased in June for the first time since the outbreak of the Iran conflict, signalling renewed stability in the property market despite ongoing economic uncertainty.
According to the latest Lloyds House Price Index, the average UK home was valued at £299,330 in June, marking a monthly increase of 0.2% after a 0.2% decline in May. Annual house price growth also edged up to 0.6%, compared with 0.5% the previous month.
Although June’s increase represents the first monthly rise since February, when average property prices reached £301,051, values remain slightly below the levels recorded at the beginning of the year.
Amanda Bryden, Head of Mortgages at Lloyds, said recent movements in the housing market continue to reflect wider economic uncertainty, including the effect of global events on inflation and interest rate expectations.
She noted that while affordability remains a significant challenge for many buyers, lower mortgage rates compared with recent highs are providing some encouragement for those considering purchasing a home.
The housing market slowdown followed the outbreak of the Iran conflict, which triggered a sharp rise in global oil prices and fuelled concerns over higher inflation. As a result, expectations of interest rate cuts by the Bank of England were replaced by speculation that borrowing costs could increase.
Since then, energy markets have stabilised. Brent crude oil has fallen back to levels close to those seen before the conflict, while the Strait of Hormuz has reopened to commercial shipping despite continuing regional tensions.
The Lloyds data also points to improving conditions for first-time buyers. Annual house price growth in this segment accelerated to 0.8% in June, up from 0.3% in May, with the average first home now costing £240,433.
Bryden said the property market is expected to continue growing at a steady pace over the coming months. She added that lower borrowing costs should help support buyer demand, although affordability pressures remain a key challenge. Future house price growth will largely depend on inflation continuing to ease and consumer confidence strengthening.
Regional figures show Northern Ireland recorded the strongest annual house price growth in the UK, with average property values rising 7.4% over the past year to £229,000.
Scotland followed with annual growth of 3.9%, taking the average house price to £223,277.
In Wales, property prices increased by 0.9% year on year, lifting the average home value to £231,142.
Across England, the strongest growth remained concentrated in the North. House prices in the North East rose 2.8% annually to an average of £181,133, while the North West recorded growth of 2.4%, with average property prices reaching £248,218.
By contrast, southern England continued to experience falling house prices. The South East recorded the largest annual decline, with average property values falling 2% to £381,654. In London, average house prices dropped by 1.1% over the year to £534,831, reflecting continued affordability pressures in the capital.