House prices went up in July, marking the biggest monthly increase so far this year, according to Halifax. Market activity is strong and affordability is gradually improving.
House prices went up in July by 0.4% according to Halifax’s latest House Price Index. This is the highest rise since the start of the year.
The average property price in the UK is now £298,237, compared to £297,157 last month. Annual house price growth went up by 2.4% in July. Affordability is still an issue for some buyers, but is easing slightly.
Affordability improving as mortgage rates ease
‘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,’ says Amanda Bryden, Head of Mortgages at Halifax. ‘Challenges remain for those looking to move up or onto the property ladder. But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving.’
Strong property market activity despite challenges
Halifax says that more flexible affordability assessments mean that the market continues to show resilience, and activity levels in the housing market are strong. ‘We expect house prices to follow a steady path of modest gains through the rest of the year,’ adds Bryden.
Northern Ireland is the region showing the strongest growth in the UK, with house prices increasing there by 9.3% over the past year. The typical home in Northern Ireland now costs £214,832. Scotland also showed positive house price growth last month, increasing by 4.7%. The average home in Scotland now costs £215,328. In addition, Wales performed well, with prices rising by 2.7% to an average of £227,928.
In England, the North West and Yorkshire & The Humber showed the highest rate of property price growth, up 4% over the last year to £242,293 and £215,532 respectively.
By comparison, the South West, London and the South East saw modest growth, with prices rising by just 0.2% and 0.5% respectively. Not surprisingly, London remains the most expensive area of the UK, with property prices in the capital averaging £539,914.
Interest rate cut could boost market confidence
The property market should be boosted further by the Bank of England’s base rate cut on 7 August. The rate was cut from 4.25% to 4%, the lowest it has been in over two years. While the cut was described as a ‘finely balanced decision’, it is encouraging news and further cuts should occur in due course.