UK housing prices rose 5.4% in June, says Zoopla’s latest housing report, which also points out that supply levels are down 25% in the first half of this year compared to H1 2020.

This, coupled with a 23% rise in demand for residential property in the year to date, has helped push the average price to a fresh high of £230,700. This, the report says, is 30% above the price peak in 2007.

Additionally, first-time buyer demand in June was up 25% compared to June 2020.

Demand has fallen slightly from its peak in April and Zoopla believes that a further softening will occur as the UK economy opens and the holiday season begins in earnest.

However, “[demand] remains significantly up from typical levels, signalling that above average activity levels will continue in the coming months,” Zoopla adds.

And the desire for houses specifically will continue to outrun that for flats. It says: “There is a continued drumbeat of demand for more space, both inside and outside, again funnelling demand towards houses, resulting in a disparity in price growth.

“Vendors will need to consider this when it comes to pricing expectations.”

Zoopla head of research Gráinne Gilmore describes house price growth in June at 7.3% compared to flat price growth of 1.4%.

Price rises were most evident in Liverpool which clocked up growth of 8.9% this June and Belfast, which witnessed an average price rise of 7.7%

Meanwhile, London’s “two-speed market” led to outer London areas seeing 86% above average demand compared to 2% above average market demand in inner London.

“Further relaxation on the restrictions around global travel will result in a firmer pick up in international demand,” says Zoopla.

And Chestertons chief executive Guy Gittens says that in the capital, “Demand is currently met by supply and in the first half of the year. Chestertons brought 46% more properties to the market compared to the same period last year.

“Due to the unusually high volume of properties available to buy, price inflation is likely to be kept at bay – at least until the end of the year.”

Zoopla concludes its report in saying it expects average prices throughout the UK to continue rising, reaching a peak of 6% before dropping into the 4% to 5% range “by the end of 2021.”

Hometrack vice president of technology Spencer Wyer comments: “A number of factors will continue the elevated demand for houses through to the end of Q4, including ongoing buyer preference for more space.

“That said, demand for flats will still be underpinned by a continuation of FTB demand, and the emergence of new sub-1% five-year mortgage products.”

“We’re observing two trends as a result of this. Firstly, as you’d expect, a continuation of the growth in higher-value mortgage applications that we first reported in response to last month’s house price index.

“Secondly – and perhaps less expected – Hometrack’s AVM is being more measured about price rises than the headline figures – providing a dependable baseline for mortgage lender decision-making. This correlates to an increase we have noticed in surveyors down-valuing physically valued properties.”