Halifax’s latest figures show that property prices have seen the highest increase since November 2022, and the possibility of further interest rate cuts offers hope to homebuyers.
According to Halifax, house prices increased by 0.3% in August, compared to a 0.9% rise in July. However, the lender’s latest House Price Index for August 2024 revealed that year-on-year prices have risen by 4.3%, marking the strongest increase since November 2022.
A typical home now costs £292,505, compared to £291,585 in July. ‘Recent price rises build on a largely positive summer for the UK housing market,’ says Amanda Bryden, Head of Mortgages at Halifax. ‘Prospective homebuyers are feeling more confident thanks to easing interest rates. That optimism is reflected in the latest mortgage approval figures, which are now at their highest level in almost two years.
‘Such has been the resilience of house prices that the average property is now just £1000 shy of the record set in June 2022 (£293,507),’ adds Bryden. ‘While this is welcome news for existing homeowners, affordability remains a significant challenge for many potential buyers still adjusting to higher mortgage costs.’
Will there be further interest rate cuts?
That said, there is a strong possibility that further interest rate reductions will happen later in the year. The Bank of England reduced the base rate from 5.25% to 5% on 1 August, marking the first rate cut since 2020.
According to the website Money Week, there may be another two base rate cuts before the end of the year. However, inflation is also predicted to creep up slightly, making cast-iron predictions impossible. The next two base rate reviews will occur on 19 September and 7 November. We will keep you informed of any base rate changes.
Areas showing key growth
Meanwhile, Northern Ireland is currently recording the strongest property price growth of any region in the UK, with prices rising by 9.8% annually in August. The average home in Northern Ireland now costs £201,043.
Wales also showed strong growth, with prices up 5.5% compared to the previous year. Properties now cost £224,433.
Unsurprisingly, London remains the most expensive area in the UK, with the average property price now at £536,056, up 1.5% from last year.