In July, British house prices experienced their most significant increase in six months, according to recent data from mortgage lender Halifax. The figures, released on Wednesday, indicate a renewed momentum in the UK property market.
Annual house prices rose 2.3%, marking the highest yearly increase since January. This growth rate approaches the 2.5% increase seen in February 2023. On a month-to-month basis, prices surged by 0.8% from June to July, surpassing economists’ expectations of a 0.3% rise.
The upward trend aligns with data from other sources. Nationwide, a rival mortgage lender, reported a 2.1% increase in house prices for the 12 months leading to July, the largest annual rise since December 2022.
This positive shift comes in the wake of the Bank of England’s recent decision to lower interest rates to 5% from a 16-year high of 5.25%, marking the first rate cut since March 2020. Amanda Bryden, Halifax’s head of mortgages, anticipates a continued modest upward trend in house prices for the remainder of the year, citing lower mortgage rates and potential further base rate reductions.
However, challenges persist in the housing market. Affordability constraints and a shortage of available properties continue to pose obstacles for prospective homeowners. The Labour Party, which won a landslide victory in the recent parliamentary election, has pledged to reform Britain’s planning system and set mandatory targets to accelerate home-building. Nevertheless, the supply shortage is expected to remain a factor influencing house prices in the medium term.
Despite the positive indicators, it’s worth noting that mortgage rates, while stabilized, remain nearly twice their pre-2022 levels due to previous economic turbulence and interest rate hikes.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
