House prices increased by 0.3% in August, following 0.9% rise in July, data from Halifax’s latest House Price Index has revealed.
The index found that throughout August, year-on-year prices increased by 4.3%, the strongest rate since November 2022.
A typical property now costs £292,505, compared to £291,585 in July, highest since August 2022.
Northern Ireland continued to record the strongest property price growth of any nation or region in the UK, rising by 9.8% on an annual basis in August.
The average price of a property in Northern Ireland is now £201,043.
House prices in Wales also recorded strong growth, up 5.5%, compared to the previous year, with properties now costing an average of £224,433.
Scotland saw a more modest rise in house prices, where a typical property now costs £205,144, 1.7% more than the year before.
The North West once again recorded the strongest house price growth of any region in England, up by 4.0% over the last year, to sit at £232,917.
London continued to have the most expensive property prices in the UK, now averaging £536,056, up 1.5% compared to last year.
Amanda Bryden, head of mortgages at Halifax, said: “House prices increased by 0.3% in August, following a rise of 0.9% in July, with the typical property now costing £292,505.
“Annual growth has risen to 4.3%, the strongest rate since November 2022, but this is due in large part to the comparison with weaker growth this time last year.
“Recent price rises build on a largely positive summer for the UK housing market. Prospective homebuyers are feeling more confident thanks to easing interest rates.
“That optimism is reflected in the latest mortgage approval figures, now at their highest level in almost two years.
“Such has been the resilience of house prices that the average property is now just £1,000 shy of the record high set in June 2022 (£293,507).”
She added: “While this is welcome news for existing homeowners, affordability remains a significant challenge for many potential buyers still adjusting to higher mortgage costs.
“However with market activity picking up and the possibility of further interest rate reductions to come, we expect house prices to continue their modest growth through the remainder of this year.”
Reaction:
Maeve Ward, head of intermediary sales at Together:
“The housing market has continued to improve in August, with prices rising by 0.3% in August as buyer and seller confidence continues to remain strong – even throughout the peak holiday season.
“With the Bank of England recently announcing its first rate reduction since 2021 and the next announcement due in a fortnight, we should see a continuation of rates among highstreet lenders falling, albeit at a slower pace than before until the next mini-budget.
“Indeed, to re energise any meaningful economic growth, it’s very likely Labour will be looking for higher levels of public investment to bring about increased private investment in the economy and use the looming budget to make this clear.
“This will hopefully include more funding into house building, which should positively impact the market.
“While this is encouraging, rate cuts may take longer to fall than initially predicted, so those eager to move forward with their plans may want to explore the range of financial products and schemes available.
“First-time buyers can look at taking advantage of Shared Ownership, and for those looking for fast and flexible finance to jump on an opportunity, there is the option of bridging loans.
“Speaking to a professional mortgage adviser is a great way to assess all the options available before making a final decision.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“The mortgage environment remains volatile, with lenders pulling deals and repricing at short notice.
“However, unlike a few months ago, the difference now is that mortgage rates are falling rather than rising, which is good news for affordability.
“Mortgage rates are at their lowest levels since March, with lenders continuing to reduce rates even though Swaps have plateaued.
“The biggest lenders are keen to attract new business, which is why we are seeing this frequent repricing downwards.
“5-year fixes have now dipped below 3.8%, initially for purchases and now for remortgages too.
“Furthermore, we are starting to see shorter-term products, such as 3-year fixes, also edge below 4%.
“How quickly or how far pricing will continue to fall by is a little more open to debate. For a significant period of time, the ‘normal’ rate environment has been between 1.5% and 2.5%.
“However, borrowers coming off such products will find they are moving onto higher rates, although these are not as expensive as they would have been three months ago.
“As rates have fallen, we have seen activity noticeably increase. Estate agents report that August was busy as motivated movers who may have delayed for a while have got on with their transactions, while we have seen people take advantage of more palatable rates.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“One small reduction in interest rates has translated into an instant response from the housing market during what is usually one of the quietest months of the year.
“In our offices, we have agreed a large number of sales in all price ranges as sellers were encouraged to reduce their pricing or seize the day and launch there and then, rather than wait for September.
“The markets are pricing in another rate cut in November, taking base rate to 4.75%, but that is very late in the day to wait to launch a property as most people want to move by Christmas.
“September or October would be a better option, ensuring the price is as accurate as possible to enable a successful and timely sale.”
Liz Edwards, money expert at personal finance site finder.com:
“Today’s figures indicate that the UK property market is continuing on its road to recovery. Last week, data from the Bank of England revealed that mortgage approvals have risen to the highest level since the mini-Budget in September 2022.
“As well as this, many are confident that there will be further cuts to the base rate before the end of the year, which should help stimulate the housing market even further.
“In fact, when we recently surveyed a panel of experts, 80% predicted that there will be at least one more base rate cut before the end of 2024.
“There’s a chance that the upcoming October Budget could dampen buyer confidence slightly, as we wait to see what the new Government has in store for our finances, but I think that any stall in the market is likely to be temporary.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“The market breathed a collective sigh of relief when first the election result ended lingering political uncertainty and again when interest rates started to fall.
“That added comfort is reflected in this solid, not spectacular, price growth figures from the country’s largest lender and reinforced by recent encouraging mortgage approval numbers.
“These show buyers and sellers did not panic but continued about their business over the summer.
“However, mortgages are still relatively expensive for many and talk of ‘a painful Budget’ by next Halloween is spooking many into holding off a little longer or at least negotiating harder to avoid what they regard as overpaying.”
Tomer Aboody, director of specialist lender MT Finance:
“With a further positive uptick in house prices compared with last year, this demonstrates the confidence among buyers who are taking advantage of lower mortgage rates.
“With the prospect of a further rate cut from the Bank of England in the offing, we are hoping to see higher transaction volumes in the final quarter of the year, although a potentially tough Budget in October could deflate the bubble or at the very least, limit that budding confidence.”
Karen Noye, mortgage expert at Quilter:
“A dip in activity is usually to be expected in the summer months, but this year it appears to be minimal, and we are instead seeing signs of an ongoing recovery in the housing market.
“Though the report from Halifax is somewhat at odds to others such as Nationwide which reported a fall in prices in August, there remains a general consensus that growth, at least on an annual basis, is picking up speed.
“The Bank of England’s decision to cut its base rate from 5.25% to 5% at its most recent monetary policy meeting will no doubt have contributed to the relatively robust market we have seen this summer, and as conditions become more predictable, we could see a rebound in prices in the autumn.
“For buyers, the impact of any Bank rate cuts in the near future will likely be relatively small, and the most immediate effects will be seen on tracker and standard variable rate mortgages, while fixed rate mortgage costs will likely factor in any cuts ahead of time.
“Though any cuts are likely to be gradual, the more stable landscape could see prospective buyers return to market.
“Though things appear to be heading in the right direction as far as mortgage rates are concerned, there are still a large number of people who are on fixed-rate deals that will soon end, forcing them to take on considerably higher bills than they have been accustomed to.
“Similarly, prospective buyers will face a dilemma as to whether to lock in a fixed-rate mortgage for the stability they provide or to opt for a tracker mortgage in the hopes that they will benefit from future rate cuts.
“For all who find themselves needing a new mortgage deal or are looking to move home, professional mortgage advice will be invaluable in ensuring they are getting the best possible deal for their circumstances.”
Verona Frankish, CEO of Yopa:
“The property market really picked up the pace in August with respect to the annual rate of house price growth seen and there’s no doubt that this improving market sentiment has been spurred by the first cut to interest rates since 2020.
“Buyers are proceeding with a renewed level of confidence and with further interest rate cuts expected before the year is out, we anticipate that market activity and house prices will continue to improve over the coming months.”
Marc von Grundherr,, director of Benham and Reeves:
“House prices continue to climb on both a monthly and annual basis and so far, it’s been a very solid summer for the UK property market, with both buyer and seller activity levels continuing to improve.
“The monthly rate of house price growth did slow in August, but this was only to be expected given that it’s summer holiday season and the real proof in the pudding is the annual rate of growth, which was the strongest seen since the back end of 2022.”
Jonathan Samuels, CEO of Octane Capital:
“The housing market has certainly stabilised during the first half of this year with a hold on interest rates helping to reduce market uncertainty and we’re now seeing momentum start to build following the base rate reduction at the start of August.
“Of course, whilst positive for homebuyers, interest rates remain considerably higher than we’ve seen in recent years, so it’s certainly a case of not running before we can walk and not overborrowing prematurely based on hopes of future rate cuts.”
