Buyer confidence grows as lenders adapt to changing affordability standards
UK house prices were stable in June, with no significant change from the previous month, according to the latest Halifax House Price Index.
This follows a slight dip of 0.3% recorded in May. The average property price stood at £296,665, marking a 2.5% increase compared to June last year.
Despite broader economic uncertainty, the market has shown signs of stability. “The market’s resilience continues to stand out and, 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,” said Amanda Bryden, head of mortgages at Halifax.
Bryden attributed the uptick in activity to improving affordability conditions. “Wages are still rising, which is easing some of the pressure on affordability, and interest rates have stabilised in recent months, giving people more confidence to plan ahead,” she said.
Bryden also pointed to recent regulatory shifts that have led to more flexibility in lending assessments. “Lenders have responded to new regulatory guidance by taking a more flexible approach to affordability assessments,” she noted. “Over the last two months, we’ve already helped an additional 3,000 buyers – including more than 1,000 first-time buyers – access a mortgage they wouldn’t have qualified for before.”
However, Halifax cautioned that affordability remains tight, especially for borrowers nearing the end of their fixed-term loans. Bryden said that while inflation has slowed, it remains above the Bank of England’s target, and the employment market may be weakening.
Still, the outlook remains cautiously positive. “With markets pricing in two more rate cuts from the Bank of England by year end, and the average rate on newly drawn mortgages now at its lowest since 2023, we continue to expect modest house price growth in the second half of the year,” she said.
Estate agents report a similar tone of cautious optimism on the ground. Amy Reynolds, head of sales at London-based agency Antony Roberts, said the ongoing resilience of the housing market, despite continued economic uncertainty, is evident with a strong number of sales agreed and prices largely holding firm.
“The flight to quality continues to be a feature, with buyers more selective and price-sensitive but continuing to transact,” she pointed out. “We’re seeing buyers lose out because they hesitated in the hope of further price drops, only for another buyer to come in and secure the property.”
Reynolds added that high borrowing costs have had a cooling effect, though limited supply in key markets continues to support demand. For some would-be movers, higher mortgage costs and lifestyle expenses — such as school fees — are putting plans on hold.
Tanya Elmaz, director of sales at specialist property lender Together, also cited buyers’ cautious approach amid still-elevated rates. “June’s house prices remaining unchanged shows a level of cautiousness lingering in the market, as potential house buyers continue to weigh up their options while mortgage rates remain relatively high,” she said.
For Nathan Emerson, chief executive of industry body Propertymark, Halifax’s June figures demonstrate that the UK housing market has faced considerable upheaval in response to a turbulent global economy and Stamp Duty thresholds in England and Northern Ireland increasing from the beginning of April.
“However, the UK government is expressing a lot of positive noises to boost England’s housing supply and increase confidence in the housing market in general,” he said. “These include creating a National Housing Bank to invest in building 500,000 new homes, and the speed at which the Planning and Infrastructure Bill has progressed through Parliament so far, all of which should have long-term benefits, alongside the devolved administrations meeting their own housing targets.”
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