"Rates have forced some house hunters to be more cautious, review their financial situation and calculate a more conservative budget."
The average UK house price was £288,000 in June, which is £5,000 higher than 12 months ago, but £5,000 below the recent peak in November 2022.
Average house prices increased over the 12 months to June to £306,000 in England (1.9%), £213,000 in Wales (0.6%) and £174,000 in Northern Ireland (2.7%), while average Scotland house prices (£189,000) remained little changed (0.0%).
The North East saw the highest annual percentage change of all English regions in the 12 months to June 2023 (4.7%), while London saw the lowest (negative 0.6%).
On a seasonally adjusted basis, the average UK house price increased by 0.3% in June, following a month-on-month decrease of 0.3% in May.
On a non-seasonally adjusted basis, prices increased by 0.7% in June, following a month-on-month increase of 0.2% in May.
Matt Thompson, head of sales at Chestertons, commented: “Although there still is a vast number of buyers wanting to move as soon as possible, rising interest rates have forced some house hunters to be more cautious, review their financial situation and calculate a more conservative budget. Whilst this resulted in fewer new buyers entering the market in June, we expect activity to pick up again once buyers have adjusted their criteria and lenders are bringing more products to the market again.”
Emma Cox, MD of real estate at Shawbrook, said: “A modest increase in house prices sees the market yet again defying expectations in the face of fluctuating rates, and a slowdown in activity. For real estate professionals, the current phase could be an opportune time to explore new possibilities.
"With the property market overall less busy, a reduction in competition from owner occupiers will create a favourable environment for landlords to consider expanding portfolios. With a robust demand in the rental market, landlords might consider diversifying into higher-yield options like Houses in Multiple Occupation (HMOs), which could in turn contribute to an increase in available properties for rent.
Nathan Emerson, Propertymark CEO, added: "The housing market remains strong for both buyers and sellers. Sellers are making a gain on their properties' price and buyers are able to negotiate to find a middle ground.
"After positive inflation news has bought the potential for a peak in interest rates sooner than previously expected, there is also some hope that fixed mortgage rates will start to fall. Even as they remain high compared to recent standards.”
