The Nationwide Building Society index has revealed that the average house price has risen by 0.2% month on month in June.
The growth has revealed the average house price has risen to £266,064 which is up by 1.5% compared to the same period last year.
Higher mortgage rates are continuing to hold back many from buying according to the Nationwide report.
Robert Gardner, Nationwide’s chief economist, said, “While earnings growth has been much stronger than house price growth in recent years, this hasn’t been enough to offset the impact of higher mortgage rates, which are still well above the record lows prevailing in 2021 in the wake of the pandemic.
“For example, the interest rate on a five-year fixed-rate mortgage for a borrower with a 25% deposit was 1.3% in late 2021, but in recent months this has been nearer to 4.7%.
“As a result, housing affordability is still stretched. Today, a borrower earning the average UK income buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 37% of take-home pay – well above the long-run average of 30%.”
Estate agent Jeremy Leaf, former residential chairman of the Royal Institute of Chartered Surveyors, said: “Early spring optimism all but disappeared when it became apparent that any reduction in mortgage rates would be delayed.
“This reliable indicator of housing market health also shows how the election announcement had little impact on prices or activity and underlines how cash purchases are playing a more important role.
“Now that inflation has started to fall, expectations are growing that the drop in base rate may not be delayed too long after all.”
CEO of Octane Capital, Jonathan Samuels, said, “Mortgage approval levels may have fallen marginally over the last two months, however, they remain considerably higher than we’ve seen for quite some time, which demonstrate that the sector is continuing to benefit from a far greater degree of stability since the base rate has been held.
There is no doubt a ‘wait and see’ element at play here as well, with a segment of buyers putting their plans to purchase on temporary hold ahead of the election. So while mortgage approval levels have remained consistent of late, we expect to see further growth in these numbers as the year progresses.”
Founder and CEO of easyMoney, Jason Ferrando, added, “Mortgage market activity remains robust and it’s clear that buyers are continuing to act with greater intent with a fourth month of approval levels sitting around the 60,000 mark.
There has been a marginal decline over the last two months and this is largely due to the expectation that an interest rate cut is imminent, with some buyers holding out in hope of lower mortgage rates.
When such a cut does materialise, it’s likely to spur these buyers to get off the fence and transact, at which point mortgage approval numbers will start to climb once again.”
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