Monthly house price growth was pegged at 0.8% in July, which comes after three relatively flat months, according to Halifax’s House Price Index.
The typical property costs around £291,268, which is up from £289,042 in June.
Drilling down into different nations, Northern Ireland had the strongest house price growth at 5.8% year-on-year in July, and this is the highest increase since February last year.
The average price of a property in Northern Ireland is £195,681.
The North West reported strong house price growth of 4.1% annually, with properties coming to £232,489, while Wales rose by 3.4% year-on-year to £221,102. The latter is the highest price seen since October 2022.
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Scotland’s house prices ticked up by 2.1% annually to £205,264.
Eastern England was the only region to report a fall, which was 0.4% year-on-year, with the average price in the region coming to £330,282.
London still has the most expensive properties in the UK, up 1.2% compared to last year and priced at £536,052.
Base rate cut and mortgage pricing falls are ‘encouraging’ for homebuyers
Amanda Bryden, head of mortgages at Halifax, said that the base rate cut last week, which came after some reductions in mortgage rates, was “encouraging” for those looking to remortgage, buy a first home or move along the housing ladder.
She continued: “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.”
Ryan Etchells, chief commercial officer at Together, agreed that house price growth showed “strong demand and positive market sentiment”, and this was underpinned by the base rate decision last week.
“Should we see additional rate reductions from the Bank of England in the short-to-medium term, we expect this will further strengthen demand in the property market.
“We have been hearing a lot about Labour’s housebuilding plans over their first month in Government. They have set an ambitious target of 370,000 new homes per year, including across brownfield, green and grey belt areas, though whether – and where – they can deliver these may continue to be an area of contention,” he said.
Etchells said that the Government needs to “set out a clear delivery plan to instil further confidence in SME developers so they press ahead with such large-scale building to create the homes needed across the UK”.
Autumn could be ‘busier than anticipated’
Holly Tomlinson, financial planner at Quilter, said that the lowering of the base rate could “see the market start to heat up”.
She continued: “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 [SVR] mortgages, 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.”
Tomlinson said that the “feeling” rates are “going in the right direction” could “help many people decide to take the leap back into the market, pushing up demand for homes”.
She noted: “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 [ERCs], 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.”
Tomlinson said that house price growth, which was good news for homeowners, continued to make it “incredibly difficult for first-time buyers”, with them either having to rely on the Bank of Mum and Dad or wait to buy a home.
“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,” she said.
This article is based on one that was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Annual house price growth hits high of 2.3% in July – Halifax
