UK house prices rose modestly in June, reversing the previous month's decline, as lower borrowing costs continued to support demand despite affordability pressures.
Prices increased 0.2% month-on-month in June, following a revised 0.2% fall in May, according to the latest Lloyds house price index, formerly under its now-retired Halifax brand.
Annual house price growth accelerated to 0.6% from 0.5%, with the average UK home now costing £299,635, up from £299,166 in May.
The regional picture remained sharply divided. Lloyds' data showed stronger price growth continued to be concentrated in northern Britain, while southern England remained under pressure.
The South East recorded the steepest annual decline, with prices down 2.0%, while values in the South West fell 1.3%. London prices were 1.1% lower than a year ago. North East prices rose 2.8% and in the North West growth was 2.4%.
Northern Ireland continued to record the strongest annual house price growth at 14.1%, followed by Wales at 3.9% and Scotland at 2.9%
Amanda Bryden, head of mortgages at Lloyds, said the housing market had shown resilience during the first half of the year, despite affordability remaining stretched for many buyers.
"Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations.
"While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move."
Recent industry data shows the number of new mortgage approvals dropped in May, following a spike in rates on the back of the Iran war.
“Looking ahead, we expect the housing market to continue moving at a measured pace. Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor," she said.
"The outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving."
