Average house prices increased by 0.8 percent, or £2,000, in July after three relatively flat months, according to Halifax research. However, one region is still struggling to see growth.
Properties in the East of England have fallen in value by 0.4 percent annually, the only region in the UK to experience a decline in July. House prices here now average £330,282, although, this is still significantly higher than the national average.
The counties in this region include Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk.
Amanda Bryden, head of mortgages, Halifax, said: “In July, UK house prices increased by 0.8 percent on a monthly basis.
“The average house price in the UK is £291,268, up over £2,200 compared to the previous month. Annual growth rose by 2.3 percent, the highest rate since the start of this year.”
Ms Bryden said the recent Bank of England Base Rate cut, coupled with lower mortgage rates, is a positive development for individuals aiming to remortgage, buy their first home, or move up the property ladder.
However, she also pointed out that affordability issues and a shortage of available properties still present significant challenges for potential homebuyers.
Despite this, Ms Bryden noted: “Against the backdrop of lower mortgage rates and potential further Base Rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year.”
According to the Halifax House Price Index, Northern Ireland continues to record the strongest annual house price growth in the UK, rising by 5.8 percent to average £195,681.
House prices in the North West also recorded strong growth, up 4.1 percent, with properties now averaging £232,489. In Wales, house prices grew by 3.4 percent to £221,102, the highest price seen since October 2022. Scotland saw a rise in house prices, with a typical property now costing £205,264, up 2.1 percent from the previous year. Unsurprisingly,
London continues to have the most expensive property prices in the UK, now averaging £536,052, up 1.2 percent compared to last year.
Commenting on the data, Holly Tomlinson, financial planner at Quilter said: “A feeling that [mortgage] rates are going in the right direction though will help many people decide to take the leap back into the market, pushing up demand for homes. Those on the fence about selling their home may also feel the time is now right.”
However, she noted that although rising house prices benefit homeowners, they make it extremely challenging for first-time buyers to achieve homeownership without substantial financial assistance from their parents or waiting much longer to save for a sufficient deposit.
Ms Tomlinson added: “This will end up being a difficult area for the Government to truly tackle, as while supply and demand play a large part in why house prices are rising, an even bigger piece of the puzzle is slow wage growth when compared to house price inflation.”
Ryan Etchells, chief commercial officer at Together, said: “A further rise in house prices reflects strong demand and positive market sentiment, underpinned by the Bank’s decision to cut interest rates to five percent last week. Should we see additional rate reductions from the Bank of England in the short to medium term, we expect this will further strengthen demand in the property market.
“We have been hearing a lot about Labour’s housebuilding plans over their first month in Government. They have set an ambitious target of 370,000 new homes a year, including across brownfield, green and grey belt areas, though whether – and where – they can deliver these may continue to be an area of contention.”
Mr Etchells urged: “The Government needs to set out a clear delivery plan to instil further confidence in SME developers so they press ahead with such large-scale building to create the homes needed across the UK.”
