It seems the great British property market has finally found something to be cheerful about with prices increasing in July according to Halifax and Nationwide.
Halifax is predicting “modest gains” for the housing market in the coming months after house prices increased by 0.4% in July, the highest since the start of the year.
The latest Halifax House Price Index suggests average property prices rose 0.4% on a monthly basis in July to £298,237 after remaining flat in June.
The annual rate of growth slowed from 2.7% to 2.4%.
Northern Ireland continues to be the strongest performing nation or region in the UK, with average house prices up by 9.3% over the past year.
The typical home now costs £214,832. Scotland also recorded positive house price growth in July, increasing by 4.7% with average prices now at £215,238. Property prices in Wales saw a rise, up 2.7% to an average of £227,928.
Among English regions, the North West and Yorkshire & the Humber have the highest rate of property price inflation, up 4.0% over the past year to £242,293 and £215,532 respectively.
The South West, London and the South East continue to see moderate growth, with prices rising by just 0.2% and 0.5% respectively. London remains the most expensive part of the UK, now averaging £539,914
Amanda Bryden, head of mortgages at Halifax, said “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. 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. Combined with the more flexible affordability assessments now in place, the result is a housing market that continues to show resilience, with activity levels holding up well.
We expect house prices to follow a steady path of modest gains through the rest of the year.”
However, she warned that many homeowners are now coming to the end of cheap fixed-rate mortgage deals secured during the pandemic.
Bryden added “the second half of this year will also see a notable rise in homeowners coming to the end of fixed-rate deals taken out during the pandemic-era property boom; a period marked by ultra-low interest rates and soaring house prices.
While most borrowers coming to the end of five-year fixed-rate mortgage deals will see their monthly repayments rise, the extent of this will vary across households. Those coming off a two year fixed-rate are very likely to see their monthly payments come down, as they originally locked in rates during the peak that followed the 2022 mini-budget. We’re unlikely to see a significant impact on house prices, but it may influence market dynamics if prospective home movers choose to delay plans as a result of tighter budgets.”
House prices grew by 0.6% in July says Nationwide
The UK’s property prices grew by 0.6% compared to June, with the average home now costing £272,664 – up from £271,619 in June, Nationwide reveals.
The lender adds that annual growth also ticked up, reaching 2.4% compared to 2.1% in June, signalling a steady but cautious market recovery. Affordability has seen a notable improvement, with the house price-to-earnings ratio dropping to approximately 5.75, the lowest in more than 10 years.
This shift, it says, could ease pressure on prospective buyers navigating a challenging economic landscape.
Nationwide’s chief economist, Robert Gardner, said “July saw a modest pick-up in the rate of annual house price growth to 2.4%, from 2.1% in June. Prices increased by 0.6% month on month, after taking account of seasonal effects. Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well.
Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre-pandemic average, despite the changed interest rate environment.”