UK house prices increased at a slower pace in June as housing affordability remained stretched, mortgage lender Nationwide said on Monday.

House prices gained 0.2 percent on a monthly basis, which was slower than the 0.4 percent rise registered in May. House prices were expected to remain flat in June.

Year-on-year, house prices posted a growth of 1.5 percent in June after rising 1.3 percent in May.

House prices are still around 3 percent below the all-time high recorded in the summer of 2022, Nationwide’s Chief Economist Robert Gardner, said.

Gardner noted that housing market activity has been broadly flat over the last year, with the number of transactions down by about 15 percent compared with 2019 levels.

Further, transactions involving a mortgage were down nearly 25 percent, reflecting the impact of higher borrowing costs. Nonetheless, the volume of cash transactions was around 5 percent above pre-pandemic levels.

Gardner said although earnings growth was stronger than house price growth in recent years, this was not enough to offset the impact of higher mortgage rates. Housing affordability is still stretched, he said.

Earlier, the property website Rightmove said house prices increased 0.6 percent year-on-year in June, the same rate as seen in May. On a monthly basis, house prices remained flat after rising 0.8 percent in the previous month.

Today, the Bank of England is scheduled to publish mortgage approvals data for May. The number of mortgage approvals is expected to fall to 60,000 from 61,140 in April.

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