House prices increased by 0.8% in July, following three relatively flat months, data from Halifax’s House Price Index has revealed.
The index also found that the annual growth rate reached 2.3%, the highest since January 2024
A typical property cost approximately £291,268 throughout the month, compared to £289,042 in June.
Northern Ireland continued to record the strongest property price growth of any nation or region in the UK, rising by 5.8% on an annual basis in July, up from 4.1% the previous month and the highest increase since February 2023.
The average price of a property in Northern Ireland during July was £195,681.
House prices in the North West also recorded strong growth, up 4.1%, compared to the previous year, at an average of £232,489.
In Wales, house prices grew 3.4% to £221,102 – the highest price seen since October 2022.
Scotland saw a rise in house prices, with a typical property costing £205,264, 2.1% more than the year before.
The only region or nation to record a fall across the UK was East England, where properties averaged at £330,282, down 0.4% on an annual basis.
London continued to have the most expensive property prices in the UK, averaging £536,052, up by 1.2% compared to last year.
Amanda Bryden, head of mortgages at Halifax, said: “In July, UK house prices increased by 0.8% on a monthly basis, following three relatively flat months.
“The average house price in the UK is £291,268, up over £2,200 compared to the previous month.
“Annual growth rose to +2.3%, the highest rate since the start of this year.”
She added: “Last week’s Bank of England Base Rate cut, which follows recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home or move along the housing ladder.
“However, affordability constraints and the lack of available properties continue to pose challenges for prospective homeowners.
“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.”
Reaction:
Sam Mitchell, CEO of Purplebricks:
“The growing confidence we’ve seen take hold of the housing market in recent weeks has been supercharged by the Bank of England’s interest rate cut.
“With lenders already slashing mortgage rates in response to last week’s decision, buyers are beginning to move ahead with purchasing decisions they have been putting off for months.
“However, the rental market is still a complete mess and there is a significant way to go before the outlook can be said to be as positive for prospective homeowners.
“The focus for the coming months must be lowering the barriers to homeownership for first-time-buyers, which will only be achieved by Labour pushing forward with its plans to ‘get Britain building’.”
Amy Reynolds, head of sales at Antony Roberts:
“With an unexpectedly busy start to August in our offices, the long-awaited cut in interest rates and removal of any election uncertainty has clearly gone down very well with prospective buyers and sellers.
“The hot, sunny weather, combined with buyers who may have delayed their plans now wanting to get on with their moves this year, is boosting activity and enquiries.
“People have long been talking about the prospect of rate cuts and now the first of these is a reality, we are hopeful this activity will continue into the autumn.
“However, buyers need to be careful what they wish for as cheaper mortgages will almost certainly mean higher asking prices.
“If we see a flurry of new applicants coming back to the market, encouraged by cheaper mortgage rates, then these higher prices are likely to be achieved.”
Mark Harris, chief executive of SPF Private Clients:
“Affordability has long been an issue for borrowers with higher mortgage rates taking their toll and impacting what buyers are prepared to pay.
“However, there is good news for borrowers with lenders continuing to cut mortgage rates for home movers.
“With NatWest reducing its 5-year fixed-rate mortgages to 3.97% this week, closely followed by HSBC with a 3.95% deal, the lending landscape is improving as rates gently edge downwards.
“Borrowers are also hopeful that the Bank of England will also make further rate cuts before the end of the year, further easing affordability constraints.”
Liz Edwards, money expert at finder.com:
“Today’s figures indicate that the housing market may finally be bouncing back.
“Last week the base rate dropped from 5.25% to 5%, and we’d already seen many lenders factor the cut into their mortgage deals before the announcement from the Bank of England.
“With lending rates beginning to come down, and hopefully on a more permanent basis than we’ve seen previously, it seems the market may be stabilising.
“Millions of households who are due to renew their fixed mortgages this year will be glad to see the threat of potentially crippling mortgage repayments finally beginning to subside.
“If we can continue on this trajectory, buyer confidence may start to stoke the market.
“In fact, Finder recently polled a panel of experts to ask how much they believe house prices will change by the end of 2024, and 70% expect house prices to rise by up to 2.5% by the end of the year.”
Holly Tomlinson, financial planner at Quilter:
“With summer typically marking a busy period for the property market, this result following three months of relatively flat results, [reflects] the difficult economic conditions we find ourselves in.
“However, given that the Bank of England has cut its base rate from 5.25% to 5%, we may see the market start to heat up.
“Although the cut in rates will have a relatively minor impact on the amount people pay if they are on tracker mortgages or standard variable rate mortgages (SVR) and no impact if they are on a fixed rate, the change in rates does a lot for buyer and seller confidence.
“Similarly, the price of fixed-rate deals had largely already priced in a small cut to the base rate, so we have not seen a huge change in the cost of these deals.
“A feeling that 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. The autumn may therefore prove to be busier than anticipated.
“However, prospective buyers are now faced with a dilemma about whether to fix their mortgage now or wait for rates to come down further.
“Lots of clients in the midst of remortgaging or buying are considering tracker mortgages without early repayment charges, allowing them to benefit from future rate cuts with the option to fix when rates are lower. However, many people like the certainty of a fixed-rate deal.
“Further house price rises, while naturally good news for homeowners, continue to make it incredibly difficult for first-time buyers to find a route to homeownership without significant help from the Bank of Mum and Dad or having to wait until much later in life to build up the necessary size of deposit.
“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.”
Tomer Aboody, director of MT Finance:
“With interest rates reduced recently following months of speculation, and a number of mortgage rate cuts as well, the fruits of this are already being reflected in market activity.
“With property prices rising, this demonstrates the positivity there is in the market.
“With traditionally stronger months of the year for the housing market still ahead of us, and banks expected to continue trimming their mortgage rates, we should hopefully see a strong end to the year.
“The only potential fly in the ointment is the October Budget, which many fear could be quite painful.”
Rob Clifford, chief executive of Stonebridge:
“The housing market has displayed remarkable resilience over the past few months and continues to defy expectations, despite challenging conditions.
“The fact that house prices leapt by 2.3% on an annual basis in July, in a continued high rate environment and during what is typically a quieter month for activity, suggests the worst is probably over for the property market.
“There’s no denying that higher interest rates are still making it challenging for first-time buyers to get onto the housing ladder or existing homeowners to trade up.
“However, the positive news is that mortgage rates have been falling recently, with sub-4% fixed rates available again for the first time in months.
“We expect the Bank of England’s decision to cut the base rate to filter through into even cheaper mortgage deals over the coming months, despite lenders having already started to reprice downwards in anticipation.
“Combined with strong wage growth, that should ease the affordability pressures buyers have been facing over the past year or so.
“As a result, there is likely to be a boost in housing market activity over the rest of 2024, as buyers who had been sat on the sidelines are thankfully willing and able to get back to the market.
“Given Labour’s plans to boost housebuilding will take a while to bear fruit, property supply will likely remain restricted, which should be supportive of house prices during the fourth quarter.”
