UK house prices were flat in June, following a small drop the month before, according to the latest data from Halifax.
The annual rate of house price inflation softened to 2.5% from 2.6%, the lender's house price index showed.
At the halfway point of the year, "the market’s resilience continues to stand out," said Amanda Bryden, Halifax's head of mortgages, who predicted modest growth in house prices in the second half of the year.
This expectation was based on markets pricing in two more rate cuts from the Bank of England by year end, with the average rate on newly drawn mortgages now at its lowest since 2023.
Last week, Bank of England governor Andrew Bailey gave heavy hints that an interest rate could be coming again in August.
"After a brief slowdown following the spring stamp duty changes, mortgage approvals and property transactions have both picked up, with more buyers returning to the market."
She attributed this to interest rates stabilising in recent months.
"Lenders have also responded to new regulatory guidance by taking a more flexible approach to affordability assessments," she said, with Halifax, though she said housing affordability is "still stretched", particularly for people whose fixed-rate deals have come to an end, with the economic backdrop also remaining uncertain.
Nicholas Finn, managing director of Garrington Property Finders, characterised the June housing market as one where "the forces of supply and demand cancelled each other out"
He said the market is "quietly resetting itself", with numbers of homes changing hands in May jumping by a quarter compared to the tumbleweed figure recorded in April.
"Cheaper borrowing costs make buying a home more affordable, and coupled with flat or falling prices, this is likely to draw more buyers out of the woodwork in the second half of the year."
He noted how the Halifax data showed how many areas were seeing the number of homes coming onto the market far exceeding the number of potential buyers, keeping price flat or even pushing prices down.
"In some areas the glut of supply is so acute that estate agents are refusing to list homes where they feel the owner is asking for an unrealistic price."
While the imbalance is greatest in southern England, Finn said this was no longer just limited to the capital and its commuter belt, with Halifax’s data showing that the slowest rate of price growth is now in the South West, where there are large numbers of second homes and holiday let properties being sold.
"The net effect has been to turn the south into a buyer’s market - in which buyers can ask for, and with the right seller, get a significant reduction in asking price."