UK house prices stall for second straight month as agents warn of summer slump

UK house price growth stalled for a second consecutive month in June as rising interest rates triggered by the war in Iran hurt homebuyer demand and agents warned of a summer slump.The average price of a typical UK home edged down to £277,484 last month from £278,024 a month earlier, after a 0.6% month-on-month fall in May, according to the lender Nationwide. Economists had forecast a small monthly rise of 0.1% in June.“There is the familiar pre-summer push from families wanting to be settled before the new school year, but the mood is steady and selective rather than booming or stalling,” said Amy Reynolds, the head of sales at the London estate agency Antony Roberts. “We expect a quieter, price-sensitive summer, with activity firming again in the autumn once buyers have more clarity on rates and the geopolitical noise has died down.”While mortgage rates have dipped slightly in recent weeks, after the price of oil returning to pre-conflict levels, they remain well above what was on offer in the market before the Iran war began.On Tuesday the average two-year fixed mortgage rate stood at 5.53%, up from 4.83% at the start of March, according to Moneyfacts. The average five-year fixed-rate mortgage was also 5.53%, up from 4.95%.“Nationwide’s figures reflect a softening housing market,” said Gareth Lewis, the deputy chief executive of the specialist lender MT Finance. “We are seeing valuers cautious on value while buyers are looking for a steal and prepared to negotiate hard on price.”The second consecutive month of flatlining house price growth – last recorded by Nationwide across March and April last year – hit shares in housebuilders.Barratt Redrow shares fell 1.6% in early trading on Wednesday, while Persimmon dipped 0.5% and Berkeley fell 1.4%.However, Nationwide said that on an annual basis the price of a typical house had increased by 2.2% in June, up from 1.7% in May.In addition, Nationwide data showed an increase in annual house prices in the second quarter in all regions of the UK.skip past newsletter promotionafter newsletter promotionThe strongest growth was in Northern Ireland, with the price of an average home up 8.6% year on year in the second quarter. Scotland and Wales recorded a 3.5% increase, while London prices edged up 1.6%.Robert Gardner, the chief economist at Nationwide, said that easing oil prices could mean the Bank of England may not have to raise interest rates as expected, which could bring down mortgage prices. Brent crude was $73 a barrel on Wednesday, down from a peak of more than $120 this year.“If the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated, a view reinforced by the fact that UK inflation has also been lower than expected in recent months,” he said. “In recent weeks a shift in market expectations for the future path of Bank rate has helped to bring down the market interest rates which underpin fixed-rate mortgage pricing.”