UK house prices rose in July – Halifax

The UK’s property values edged up in July, marking the biggest monthly increase this year, Halifax reveals.

It says that the average home now costs £298,237, a 0.4% rise from June’s £297,157, translating to an extra £1,080.

Over the past year, prices have grown by 2.4%, slightly down from June’s 2.7%.

Mortgage rates are easing

Amanda Bryden, the head of mortgages at Halifax, said: “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.”

Halifax says the housing market’s resilience is evident, with activity levels holding steady and house prices should continue rising this year.

However, the market will see lots of homeowners reach the end of their fixed-rate mortgage deals which were secured during the low-interest-rate period of the pandemic.

Remortgaging issues

Ms Bryden said: “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.”

She adds: “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.”

Northern Ireland has biggest rises

Regionally, Northern Ireland led with a robust 9.3% annual increase, bringing the average home price to £214,832.

Scotland followed with a 4.7% rise, with homes now averaging £215,238.

Wales saw a 2.7% uptick, with properties at £227,928.

In England, the North West and Yorkshire and the Humber recorded 4.0% growth, with average prices at £242,293 and £215,532, respectively.

Growth was slower in the South West and South East, at 0.2% and 0.5%, while London, despite modest gains of 0.5%, remains the priciest region at £539,914.

Reaction from the property sector

Nathan Emerson, the chief executive of Propertymark, said: “This is a glimmer of good news for consumers considering it has been reported that there are economic headwinds ahead of us soon, and this news proves that house prices are adapting to recent Stamp Duty changes despite other reports suggesting that housing activity has slowed due to these tax increases.

“Lenders are adapting to market trends by offering more competitive products, however, with the average deposit needed to purchase a home now exceeding £60,000, more support is needed to make homeownership a realistic aspiration for more people.”

Matt Thompson, the head of sales at Chestertons, said: “Many house hunters feel that the property market now provides a window of opportunity as more properties are up for sale.

“Last month, some of our branches registered an evident uplift in the number of vendors wanting to sell which has motivated more buyers to resume their search and make an offer.”

Jason Tebb, president of OnTheMarket, said: “The housing market continues to demonstrate remarkable resilience, shaking off external economic concerns amid evidence of plenty of activity.

“While the average house price is close to a record high, this is only part of the picture as behind the headline figure are considerable regional variations and differences according to property type.”

Tom Bill, the head of UK residential research at Knight Frank, said: “The UK housing market is getting back on its feet following the disruption of April’s stamp duty cliff edge, but high levels of supply are keeping prices in check.

“We expect low single-digit annual growth by the end of the year but that depends on the content of the autumn Budget.

“Some parts of the economy are already adopting the brace position and buyers could begin to hesitate after the summer if speculation over tax rises persists.

“The conundrum for the housing market is that the government needs to increase its financial headroom to keep borrowing costs in check but without sentiment-sapping tax hikes.”

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “July saw the housing market warm up very slightly, after the end of the stamp duty holiday saw dark clouds move in from April, driving buyers away.

“Balmier conditions have seen some of them return, and the sun is coming out for sellers in some regions.”