House prices remained “subdued” for a third month in a row in June, as a shortage of properties kept prices high, according to the mortgage lender Halifax.

The average house price hit £288,455 last month, down only 0.2% on the £288,931 recorded in May, while house price growth on an annual basis remained unchanged at 1.6%.

The latest figures mark the third consecutive month that house prices have stayed relatively stable, with a drop of only 0.3% between April and May, and an increase of 0.1% between March and April.

Amanda Bryden, the Halifax head of mortgages, said: “On an annual basis, house prices posted a seventh consecutive month of year-on-year growth, with the average UK property value now standing at £288,455.

“This continued stability in house prices – rising by just 0.4% so far this year – reflects a market that remains subdued, though overall activity has been recovering.

“For now, it’s the shortage of available properties, rather than demand from buyers, that continues to underpin higher prices.”

She said that mortgage affordability remained the biggest challenge for new homebuyers, as well as those coming to the end of deals.

Analysis by Rightmove, published last month, found that monthly mortgage costs for first-time buyers had increased by more than 60% since the last general election.

It said the average monthly mortgage payments for a typical first-time buyer was now £1,075 a month, up from £667 in 2019.

Bryden said that she expected mortgage costs to ease gradually through a combination of lower interest rates, rising incomes and more restrained growth in house prices.

Mark Harris, the chief executive of the mortgage broker SPF Private Clients, said: “With the big five lenders – Barclays, HSBC, Santander, Halifax and NatWest – reducing their mortgage rates this week, lenders continue to jostle for business as they ramp up the summer sales.”

Earlier this week, Barclays announced that it would cut a selection of its fixed-rate mortgages by 0.27 percentage points, while Halifax lowered rates by 0.19 points and Santander cut rates by 0.16 points on Thursday.

Harris said: “Those lenders who haven’t yet repriced are likely to follow suit, as long as service levels allow, which is welcome news for hard-pressed borrowers.”

London continues to have the most expensive property in the country, with the average home in the capital costing £536,306, up 0.9% in June on a year earlier.

The south-east of England was the second most expensive area, with the average house price at £385,056, while the north-east was the least expensive, with the average property costing £172,308.

The highest property price growth in the UK was in Northern Ireland, with properties costing £192,457 on average, a 4% increase on an annual basis.