UK house prices stay the same for the second month in a row as agents warn of a summer slowdown

The UK housing market has seen house prices stop growing for the second month running in June. This is happening because interest rates, which have increased because of the war in Iran, are making it harder for people to buy homes. Estate agents are now warning that the market could slow down even more over the summer.

The average price of a typical home in the UK decreased slightly to £277,484 in June. This follows a 0.6% drop in May. Experts had expected a small increase of 0.1% for June. This lack of growth is worrying for the market.

Estate agents say that while some families want to buy a house before the school year starts, the overall feeling is calm rather than busy. They expect a quieter summer where buyers will be very careful about prices. Activity might pick up again in the autumn after people have more certainty about interest rates and as the global situation becomes clearer.

Recently, mortgage rates have decreased a little. This is partly because oil prices have gone back to levels seen before the conflict in Iran. However, these rates are still much higher than they were before the war started.

For example, the average rate for a two-year fixed mortgage is now 5.53%, which is higher than the 4.83% seen at the start of March. Similarly, the average five-year fixed-rate mortgage is 5.53%, up from 4.95%.

Experts from the lending industry are noticing that the housing market is becoming weaker. They report that property valuers are being careful about how much they think houses are worth. At the same time, buyers are looking for good deals and are ready to negotiate hard on prices.

This continued period of no house price growth, which Nationwide last recorded in March and April of the previous year, has affected the stock prices of companies that build houses. Shares in major housebuilders like Barratt, Redrow, Persimmon, and Berkeley all fell on Wednesday.

Despite the recent trends, Nationwide reported that house prices have increased by 2.2% over the past year in June. This is a slight increase from the 1.7% annual growth seen in May. The data also showed that house prices grew in all regions of the UK during the second quarter of the year.

Northern Ireland saw the biggest increase in house prices, with an average home costing 8.6% more than a year ago in the second quarter. Scotland and Wales experienced a 3.5% rise, while prices in London went up by 1.6%.

The chief economist at Nationwide suggested that if oil prices continue to fall, the Bank of England might not need to raise interest rates as much as previously expected. This could lead to lower mortgage rates. Brent crude oil was priced at $73 a barrel recently, down from a high of over $120 earlier this year.

He added that if the energy price shock continues to decrease, the Bank of England may not have to increase interest rates, or at least not by as much as people thought. This idea is supported by the fact that UK inflation has also been lower than expected recently. A change in market expectations for future interest rates has helped to lower the market rates that influence fixed-rate mortgage prices.