UK house prices stagnate despite easing mortgage costs
The average property price is flat at £277,484 after a 0.6% drop in May
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[LONDON] UK house prices failed to grow for a second straight month in June, the Nationwide Building Society said, as mortgage rates held above the levels that existed before the US and Israel launched their war against Iran.
The average property price was flat at £277,484 (S$367,377) after a 0.6 per cent drop the previous month, data released by the lender on Wednesday (Jul 1) showed.
It was slightly worse than the 0.1 per cent gain expected by economists.
The conflict rattled the mortgage market and ended a strong start to the year for house prices, with borrowing costs pushed by the expectation that the Bank of England (BOE) would need to hike rates to curb inflation.
Costs for homebuyers have also cooled from the highs in April.
Mortgage rates may fall further in the coming months, as investor bets on BOE hikes retreat in anticipation that the truce between the US and Iran will hold.
Markets are pricing in less than a quarter-point rate increase by the end of the year, while many economists believe the UK central bank can avoid hikes altogether as the inflation threat recedes.
Moneyfacts data on Tuesday showed the average two-year fixed mortgage rate has fallen to 5.53 from 5.9 per cent at the peak. That is still 0.7 percentage points above the levels that existed before the war. BLOOMBERG
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