A prominent estate agent says there is a reluctance amongst some sellers to recognise the new market realities and price homes accordingly.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Property prices have held up surprising well, bearing in mind continuing concerns about the impact of war on the cost of living and energy prices, as well as mortgage rates in particular.

“However, we are finding reluctance of some owners to recognise the new market realities of reduced confidence and difficulty of generating offers is holding back transactions.

“Now, political uncertainty [over the UK Prime Minister’s fiscal policies] is providing another excuse for buyers and sellers to sit on their hands. 

“Speculation about tax undermines willingness to take on debt so the sooner Andy Burnham is confirmed as prime minister and we know where costs are likely to be changed the better.”

Leaf was making his remarks in response to the news that house prices rose for the first time in four months during June, increasing by +0.2%, compared to May. 

This is according to the Lloyds House Price Index – the new name for the long-standing Halifax index.

The typical property now costs £299,330, while the annual rate of growth also edged higher to +0.6%.

Amanda Bryden, head of mortgages at Lloyds, says: “Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations. 

“While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move.

“While latest industry data shows the number of new mortgage approvals dropped in May, this wasn’t unexpected given the spike in rates seen earlier this year, and we’d expect to see activity recover assuming borrowing costs continue to fall.

“For first-time buyers, annual price growth increased to +0.8% in June from +0.3% in May, with the average first-time buyer property now costing £240,433, suggesting demand remains resilient.

“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.”

Tom Bill, head of UK residential research at Knight Frank, says the latest index shows thatprices are going sideways and transactions are falling as the result of higher mortgage rates since the start of the Middle East conflict. 

“The good news is that geopolitical risks are subsiding as both sides move gradually towards a ceasefire and mortgages are edging lower” he adds. 

“The bad news is that domestic political risks are rising and various trial balloons about changes to property taxation are being floated for the third consecutive year, which will keep a lid on activity and prices this summer.”