Inflation holds steady at 2%

The rate of inflation held steady last month, raising hopes that the Bank of England will give homebuyers a boost with an interest rate cut 

The latest consumer price index figures showed inflation was level at 2% in June.

The largest upward contribution to the monthly change came from restaurants and hotels, while the largest downward contribution came from clothing and footwear.

When housing costs are included, the rate was 2.8%, with owner occupiers' housing costs (OOH) rising by 6.8% annually - the highest annual rate since July 1992.

Commenting on the figures, Nathan Emerson, chief executive of Propertymark, said: “The positive news is that inflation remains in line with the Bank of England’s target of 2%, which means that consumers should not continue to witness the price rises we saw across 2022 and 2023. 

“Although a further drop in inflation today would have been welcome by consumers, Propertymark is keen to see the Bank of England consider a dip in interest rates as soon as sensible. When the pathway to lower interest rates finally happens, we should witness a real boost in affordability and flexibility within the housing market.”

The Bank of England’s next monetary policy meeting to decide interest rates is on 1 August.

It comes as Land Registry data shows average house prices rose at their highest rate for 14-months in May.

Average UK property values rose 2.2% annually during May, according to the latest Land Registry House Price Index.

It follows a 1.3% annual house price rise recorded for April 2024.

Average house prices were also up on a monthly basis by 1.2%, putting average UK house price at 285,201, which is £6,000 higher than 12 months ago