UK house prices dropped in June after remaining stable for two straight months, signaling that the property market remained subdued, mortgage lender Halifax reported Friday.
House prices fell 0.2 percent month-on-month in June, in contrast to the expected increase of 0.2 percent. A typical UK house costs GBP 288,455.
Compared to the last year, house prices climbed 1.6 percent, the same annual rate as reported in May. This was the seventh consecutive increase.
The continued stability in house prices reflects a market that remains subdued but overall activity has been recovering, Halifax Head of Mortgages Amanda Bryden said.
It is the shortage of available properties, rather than demand from buyers, that continues to underpin higher prices, Bryden noted.
Bryden said mortgage affordability continued to be the biggest challenge facing both homebuyers and those coming to the end of fixed-term deals.
Through a combination of lower interest rates, rising incomes, and more restrained growth in house prices, this issue is likely to be eased gradually, added Bryden.
Halifax expects property prices to rise modestly through the rest of this year and into 2025.
At the June meeting, the Bank of England had retained its key policy rate at a 16-year high for the seventh straight session despite inflation easing to the 2 percent target.
Halifax data showed that London continued to be the most expensive region, with house prices averaging GBP 536,306, up 0.9 percent from the last year.