Annual house price growth accelerates to 2.2%, led by Northern Ireland
“The UK housing market is proving to be a study in resilience rather than exuberance,” said Anthony Codling, housing analyst at RBC Capital Markets. The average price of a home dipped £540 in June from May but rose almost £6,000 year on year.
The average UK home now costs £277,484, a market that is moving sideways more than it is marching forward. The headline number tells one story, but the regional picture tells a more interesting one: Northern Ireland is doing its own thing entirely, running nearly four times hotter than the national average, while much of southern England is essentially flatlining.
Mortgage rates remain the stubborn gatekeeper to a more meaningful recovery, with affordability still stretched by historical standards, and the Bank of England’s cautious approach to rate cuts keeping buyers in a holding pattern.
It is not surprising that the market has softened a little in recent months, given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates. Indeed, consumer confidence and measures of housing sentiment have weakened, and mortgage approvals fell noticeably in May.
While geopolitical tensions remain high, the signing of a memorandum of understanding between Iran and the US helped push oil prices back towards the levels prevailing before the conflict began.
If the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated – a view reinforced by the fact that UK inflation has also been lower than expected in recent months.
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