- Average house prices rose just 0.6% in the year to June (source: the newly rebranded Lloyds House Price Index – June 2026)
- They were up 0.2% in a month to £299,330 – the first rise in four months
- Iran peace agreement brought mortgage rates down, but path of inflation remains uncertain
Sarah Coles, head of personal finance at AJ Bell, comments:
“The newly rebranded house price index started with a whimper, not a bang. On the plus side, house prices rose for the first time in four months. On the downside, they were only up a whisker, and the signs for the rest of the summer don’t look particularly hot either.
“The small rise in prices in June will owe something to the Iran peace agreement, which lowered inflation expectations and brought mortgage rates down. It’s likely to have meant borrowers were able to squeeze more out of their monthly budget, and make a higher offer on their new home.
“However, one swallow doesn’t make a summer, and one small bump doesn’t mean the end of tougher times for the property market. There’s still a huge amount of global uncertainty as the peace deal remains fragile. Closer to home, the picture has started to look marginally more positive, with unemployment falling a little and economic growth edging up. But this is unlikely to move the dial just yet.
“Unemployment has been trending up for the past four years, and while we’ve seen a few more positive months over that time, it hasn’t turned the tide. Meanwhile, economic growth might be positive right now, but real household disposable income still fell in the first three months of this year, so prospective buyers may be feeling overstretched already.
“Early indications are that enthusiasm and optimism remain thin on the ground in the property market. The RICS Residential Market Survey showed buyers stayed home in May, so there were fewer sales agreed. Meanwhile, the Bank of England data showed fewer mortgages agreed in May – which tends to mean a sluggish few months are on the cards.
What can you do?
“Anyone in a position to buy right now has a brilliant opportunity to drive a hard bargain in a buyers’ market. Those who’d have to stretch their finances further for a purchase, and are hesitant to do so, can take comfort in the fact that slow property price growth gives them time to build.
“For first-time buyers that could mean using this year’s Lifetime ISA (LISA) allowance to boost your deposit – with the added benefits of the government bonus. The days when you can open a LISA may be numbered, but those who have one open by the time they’re discontinued can benefit from it for life. If you’re earlier in your house-buying journey it could also be an opportunity to invest using your Lifetime ISA to help give your pot the best chance of growth over the years.”
