Property values rose in 0.8 per cent in July, the fastest growth this year in a further sign that confidence is slowly returning to the market.
The average house price in the UK is £291,268, up over £2,200 compared to the previous month, according to latest data from the Halifax house price index.
It said the Bank of England’s rate cut last week was “encouraging” for potential buyers. It said it expected house prices “to continue a modest upward trend” during the rest of this year.
Northern Ireland recorded the strongest annual house price growth in the UK in August. with prices rising 5.8 per cent on an annual basis in July, the highest increase since February 2023, to an average of £195,681. In Wales, house prices grew 3.4 per cent, while in Scotland they were up 2.1 per cent over the last year. Prices in North West England rose 4.1 per cent.
Halifax said London continues to have the most expensive property prices in the UK, now averaging £536,052, up 1.2 per cent compared to 2023.
The East of England was the only region or nation to record a fall across the UK – down 0.4 per cent.
Amanda Bryden, Halifax head of mortgages, said: “In July, UK house prices increased by 0.8 per cent on a monthly basis, following three relatively flat months. Annual growth rose to 2.3 per cent, the highest rate since the start of this year.
“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.”
Nathan Emerson, of Propertymark, the property professionals body said: “It is extremely positive to see further growth within the housing sector, especially following what has been a tough time across the last few years for consumers.
“With inflation now down at targeted levels and with a very welcome cut in interest rates last week, Propertymark is extremely optimistic to see a real uplift across the housing sector over the coming months.
“Assuming the economy remains stable in September, it would be good to see the central bank continue to gradually cut interest rates as conditions permit. It is a case of all eyes on the UK Government regarding their housebuilding programme, as well as learning more regarding support for potential first-time buyers.”
Sam Mitchell, chief executive of online house seller Purplebricks, said: “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.
“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’.” He warned the rental market remained a “complete mess”.
