UK House Prices Stagnate Amid High Mortgage Rates and Affordability Concerns

UK house prices have stagnated in July, as high mortgage rates and strained affordability continue to deter potential buyers. The average property price dropped to £299,253, a nominal decrease of just £143 from June, according to Lloyds' latest house price index.

This represents the weakest annual growth rate since November 2023, with prices rising by only 0.1% year-over-year. Amanda Bryden, head of mortgages at Lloyds Banking Group (LLOY.L), noted that housing demand remains stable but is extremely sensitive to changes in borrowing costs.

'Activity continues to respond quickly to changes in mortgage rates,' Bryden said. 'Looking ahead, we expect market activity and house prices to remain relatively stable over the remainder of the year.'

The stagnation comes despite the Bank of England keeping its base rate at 3.75%. Lenders have been increasing their mortgage rates due to global uncertainty rather than domestic monetary policy shifts.