UK house prices rose by 0.4% in July, adding £1,080 in cash terms to reach an average of £298,237, according to the latest figures from Halifax.
It marks the strongest monthly gain since the start of 2025 and brings annual growth to 2.4%, despite a 0.1% fall over the past quarter.
Amanda Bryden, head of mortgages at Halifax, said: “UK house prices rose in July, up by +0.4% (£1,080 in cash terms), the biggest monthly increase since the start of this year.
“The average house price is now £298,237, +2.4% higher than a year ago. While the national average remains close to a record high, it’s worth remembering that prices vary widely across the country depending on a number of factors, not least location and property type.”
Bryden added that although affordability remains a challenge for many, easing mortgage rates and rising wages are beginning to improve conditions for buyers.
“Combined with the more flexible affordability assessments now in place, the result is a housing market that continues to show resilience, with activity levels holding up well. We expect house prices to follow a steady path of modest gains through the rest of the year.”
She also noted the impact of expiring fixed-rate mortgage deals: “The second half of this year will also see a notable rise in homeowners coming to the end of fixed-rate deals taken out during the pandemic-era property boom; a period marked by ultra-low interest rates and soaring house prices.
“While most borrowers coming to the end of 5-year fixed-rate mortgage deals will see their monthly repayments rise, the extent of this will vary across households.
“Those coming off a 2-year fixed-rate are very likely to see their monthly payments come down, as they originally locked in rates during the peak that followed the 2022 mini-budget.”
Nathan Emerson, CEO of Propertymark, welcomed the figures but called for greater government action on supply and affordability: “This is a glimmer of good news for consumers considering it has been reported that there are economic headwinds ahead of us soon, and this news proves that house prices are adapting to recent Stamp Duty changes despite other reports suggesting that housing activity has slowed due to these tax increases.
“Lenders are adapting to market trends by offering more competitive products, however, with the average deposit needed to purchase a home now exceeding £60,000, more support is needed to make homeownership a realistic aspiration for more people.”
Tomer Aboody, director at MT Finance, added: “Lower mortgage rates, combined with sellers pricing more sensibly even though the national average house price is close to a record high, is encouraging buyers to transact and take advantage of finding themselves in a reasonably strong position.
“With at least one more rate cut expected this year, both buyers and sellers are hoping for a strong second half of the year.”
Further reaction
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“While in our offices we experienced a brief lull in activity at the start of the school holidays, it has picked up significantly since then. Serious buyers are committing and keen to move before the end of the year.
“However, there’s a definite sense that everyone – buyers, sellers, and estate agents – is waiting to see what happens with interest rates. The possibility of a reduction in mortgage costs is a frequent topic of conversation.
“For any vendor waiting until the end of the holidays and the children go back to school before launching their property onto the market, it makes sense to do so as soon as you are ready. A sudden influx of properties could upset the current balance. Right now, we have a healthy equilibrium between supply and demand, and a steady flow of new instructions is key to maintaining that momentum.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“Buyers and sellers are heartened by cuts in mortgage rates, and are overcoming worries about broader economic prospects, such as the almost-inevitable autumn tax hikes.
“The overwhelming majority of agreed sales are proceeding but buyers are still ruling the roost and negotiating hard. The continuing excess of supply over demand is putting a stop to any strong price rebound and keeping values in check for the foreseeable future, reflected in the modest uplift of these latest figures.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“Another cut in interest rates this month, as expected by the markets, should further boost confidence and activity in the housing market. While inflation remains higher than the Bank of England’s target, wage inflation is slowing and unemployment rising. However, despite wider economic uncertainties the picture for potential home buyers remains broadly stable.
“Mortgage rates continue to edge downwards but it’s not just pricing that is improving with lenders also broadening policy, including increasing loan-to-income caps and lowering some income requirements, which is boosting affordability.”
Jason Tebb, president of OnTheMarket:
“The housing market continues to demonstrate remarkable resilience, shaking off external economic concerns amid evidence of plenty of activity.
While the average house price is close to a record high, this is only part of the picture as behind the headline figure are considerable regional variations and differences according to property type.
“Recent base rate cuts have been fundamental in boosting confidence and activity. Further rate reductions from the Bank of England will provide much-needed stimulus for the market and boost buyer and seller confidence as we head towards autumn. Further relaxing of criteria by lenders will also help with this.”
Thomas Lambert, financial planner at Quilter:
“The latest Halifax House Price Index shows that house prices rose by 0.4% in July, taking annual growth to 2.4%. After a subdued first half of the year, this suggests some momentum is building again and represents the biggest monthly increase since the start of the year.
“This improvement comes despite the lingering impact of stamp duty threshold changes earlier in the year, which have increased upfront costs for many buyers and us being deep into the summer lull. While mortgage rates have drifted lower and affordability rules have been eased, many households are still constrained by high living costs and sluggish income growth. For first-time buyers, even small increases in rates or property prices can make the difference between buying and staying put.
“While markets have priced in a rate cut later today from the Bank of England, stickier-than-expected inflation has clouded the picture, and a hold could happen, which could shift the direction of travel.
“There was, however, some welcome news for borrowers recently as the Financial Conduct Authority announced changes to its mortgage rules, easing affordability requirements for customers looking to switch to cheaper deals or reduce the term of their mortgage. Removing the need for a full affordability assessment in certain cases, such as reducing mortgage terms or switching to a more affordable product, should help borrowers make financially beneficial changes with less friction. This is particularly timely given the rise in longer-term mortgages that stretch into retirement, which pose risks to later-life finances.
“Still, reducing your mortgage term will usually mean higher monthly repayments, so it won’t be suitable for everyone. In some cases, continuing with a longer term and making regular overpayments could strike a better balance between flexibility and interest savings.
“The FCA’s move, alongside the Treasury’s decision to make the mortgage guarantee scheme permanent, signals a growing focus on tackling the structural barriers to affordability. But while these changes are helpful, they won’t fix the bigger issue which is a lack of housing stock.
“As we move towards autumn, the stamp duty changes will begin to fade into the rear-view mirror, and some of the recent hesitancy could translate into renewed activity, particularly if the Bank of England signals that more rate cuts are still on the table for later in the year. The path ahead will depend heavily on what happens next with interest rates and household finances.”
