UK house prices edged higher in June, increasing by 0.2% month-on-month after a 0.2% fall in May, while annual growth accelerated slightly to 0.6% from 0.5%, according to the newly renamed Lloyds house price index (HPI).

The latest Lloyds HPI, formerly Halifax HPI, showed the average UK house price rose to £299,330 in June, up from £298,812 in May.

Northern Ireland remained the strongest-performing UK market, with annual growth of 7.4%, followed by Scotland at 3.9%. In England, the North East and North West continued to outperform, while the South East and London recorded annual price declines of 2.0% and 1.1% respectively.

It also found that first-time buyer (FTB) prices rose 0.8% annually, with the average FTB property costing £240,433, suggesting demand remained resilient.

"House prices rose for the first time in four months during June," said Amanda Bryden, head of mortgages at Lloyds. "While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move."

Lloyds said recent price trends continued to reflect economic uncertainty, but lower mortgage rates should help support activity if borrowing costs continue to fall.

"Looking ahead, we expect the housing market to continue moving at a measured pace. Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor. The outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving," Bryden added.

HMRC data cited in the Lloyds HPI report showed UK residential transactions fell 2% month on month in May to 98,450 on a seasonally adjusted basis, although volumes remained 16.6% higher than a year earlier. In parallel, the latest RICS survey indicated buyer enquiries and agreed sales remained subdued, but showed signs of stabilising.

Commenting on the latest Lloyds figures, Nathan Emerson, CEO of Propertymark, said it was "encouraging to see average UK house prices deliver growth", but warned that weaker mortgage borrowing and political uncertainty could influence the market over the summer.

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