Annual house price growth in the UK slowed marginally in June, according to figures released Monday by mortgage lender Halifax, though signs of renewed momentum in property transactions and mortgage approvals suggest the housing market is regaining pace after a spring lull.
Prices rose 2.5% year-on-year in June, down slightly from 2.6% in May. On a monthly basis, prices were unchanged, following a 0.3% dip in May. The figures come as activity levels begin to recover from a temporary slowdown linked to changes in stamp duty thresholds earlier this year.
“The market’s resilience continues to stand out,” said Amanda Bryden, an analyst at Halifax. “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.”
Bryden attributed the recovery to several stabilising factors, including rising wages and steady interest rates, which she said have helped ease affordability pressures and boosted consumer confidence.
However, she warned that challenges remain. “Affordability is still stretched, particularly for those reaching the end of fixed-rate deals. And while inflation has eased, it remains above the Bank of England’s target, with early signs of a softening jobs market.”
Market expectations of further rate cuts by the Bank of England have also begun to influence borrowing costs. The average rate on newly drawn mortgages has now fallen to its lowest level since 2023, as investors price in the likelihood of two additional cuts this year.
The Bank of England has already cut rates twice in 2025 — by 25 basis points in both February and May — and held steady in April and June. The bank rate currently stands at 4.25%, with the next policy decision due on August 7.
Housing activity earlier this year was dampened by the expiry of temporary stamp duty relief measures introduced in 2022. From the end of March, the zero-rate threshold for first-time buyers fell to £300,000 from £425,000, and for other buyers to £125,000 from £250,000 — changes announced by Chancellor Rachel Reeves in last autumn’s budget.
Despite the headwinds, Halifax expects house prices to see modest growth in the second half of the year.