British equities pushed higher on Tuesday as a rebound in house prices and strong energy sector gains lifted the FTSE 100 index by 0.13%.
UK average house prices rose 0.2% month over month in June, reversing a revised 0.2% decline recorded in the previous month, according to data published by Lloyds.
The June reading exceeded analyst expectations, which had pointed to a more modest 0.1% increase, offering a measure of relief to markets watching the housing sector closely.
Lloyds Head of Mortgages Amanda Bryden offered a cautiously optimistic outlook, saying: “Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor.”
Bryden added that “the outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving,” tempering any suggestion of a swift or dramatic recovery.
RBC Capital Markets described the data as a positive signal following a turbulent stretch, noting that “after a choppy few months shaped by global uncertainty, tariff-driven inflation anxiety and the resulting rate volatility, June’s data offers a tentative but welcome signal that the market is finding its footing.”
The bank added that lower mortgage rates and resilient first-time buyer activity could support a stronger second half of the year, even as affordability remains stretched and broader buyer demand stays subdued.
Investors will next turn their attention to the Royal Institution of Chartered Surveyors house price balance report due Thursday, with analysts expecting the figures to show an improvement for June.
Shell (SHEL.L) was one of the standout performers on the blue-chip index, climbing 3.38% after the energy giant updated its integrated gas and upstream production guidance for the second quarter, projecting “significantly higher” gas trading compared with the first quarter.
Shell also announced an agreement to sell its South African downstream business to Adnoc Distribution, in a deal that values the operation at an implied enterprise value of $1 billion and covers 580 company- and dealer-owned fuel stations.
On the downside, FTSE 250-listed Capita (CPI.L) fell sharply by 13.54% after the business process outsourcing company acknowledged that its management of the Civil Service Pension Scheme has “not been good enough.”
Capita also issued an apology for delays in handling bereavement, retirement, and quotation cases, compounding investor concern about the firm’s operational performance and near-term outlook.
Geopolitical tensions added a note of caution to markets, with two commercial vessels reportedly struck in the Strait of Hormuz during the session.
Iran’s Foreign Minister Abbas Araqchi stated that Tehran would not resume negotiations with Washington unless US President Donald Trump ended what he described as threats, adding another layer of uncertainty to global energy supply outlooks.