Lloyds HPI June 26

Things are looking brighter in June but a measured pace for house price growth seems an accurate prediction after a difficult first half to the year and the ongoing threat of inflation. The acceleration in annual price growth for first-time buyers suggests the price window that has been open in 2026 to date is starting to close. Rising prices benefit homeowners but simply add to the challenges for those aspiring to get onto the ladder. The good news is that mortgage rates are continuing to edge down, with Nationwide shaving its rates by up to 0.19% from today. Overall, this house price index suggests some positive sentiment is starting to return to the market.

It feels like the property market is starting to turn after the volatility caused by the war in the Middle East. House prices are moving up again and mortgage rates are coming down, which always starts to drive demand. The next set of inflation data and the interest rate meeting at the end of July will, of course, be key. But for now the outlook is looking a bit brighter.

A monthly movement of 0.2% doesn’t suddenly mean the market has changed direction. National house price averages are useful for spotting broad trends, but they’re a poor guide to the value of the individual property you’re hoping to buy.

For first-time buyers, the bigger question isn’t whether prices rise or fall by a fraction in any one month. It’s whether the home they want remains affordable and whether they’re in a position to act when the right property comes along.

No one buys the average UK house, so don’t let a national average make your decision for you.

Steady house price growth is good news for the market. We’re seeing confidence gradually return without the risk of another unsustainable boom. The challenge for first-time buyers is that today’s modest rises could become tomorrow’s stronger increases if mortgage rates continue to ease and more buyers return to the market.

Sentiment is starting to improve along with mortgage rates and that bodes well, well at least better, for the second half of the year. Demand for property is growing as mortgage rates continue to fall but inflation will need to play ball. There's still a lot of uncertainty but the property market, as ever, will likely remain resilient. The autumn property market could be a busy one after the spring season was impacted by the Middle East conflict.