House prices grew by 0.6% in July – 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.

Markey activity holding up

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.”

He added: “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.”

Property sector reaction

Nathan Emerson, Propertymark‘s chief executive, said: “With continued talk of a gradual easing of interest rates, even while inflation remains above the Bank of England’s targeted rate of 2%, it is vital that this results in more affordable mortgage products for aspiring buyers and home movers.

“Many people are delaying paying off their mortgages until later in life via 35-year or 40-year mortgages.

“Therefore, a reduction in interest rates would be very welcome to help offset ongoing financial pressures and worries over the cost of living for many.”

Matt Thompson, the head of sales at Chestertons, said: “We have been seeing house hunters pausing their search amid the economic climate and level of interest rates but many feel that the property market now provides a window of opportunity as more properties are up for sale.

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

Director of Benham and Reeves, Marc von Grundherr, said: “The monthly rate of house price growth has been unpredictable of late, however, July saw the decline of the previous month reversed and we continue to see a consistently strong performance where the annual rate of growth is concerned – which is a far better indicator of the health of the market.

“This overarching air of positivity has been driven by buyers returning with confidence and, since March of last year, we’ve seen mortgage approvals remain above the 60,000 threshold.”

Tom Bill, the head of UK residential research at Knight Frank, said: “The housing market is getting back on its feet after a slowdown in the second quarter of the year due to the stamp duty cliff edge in April and a general mood of economic uncertainty.

“Mortgage rates are at similar levels to last October before the Budget, which has supported demand, although sticky inflation means a probable cut by the Bank of England next week may only be followed by one more this year.

“Despite a modest uptick in July, high levels of supply are keeping a lid on prices and means it is still very much a buyers’ market.”

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “There are some early signs that the property market might be starting to come round from its post-stamp-duty-slump.

“However, it’s too early to break out the bunting, because right now it’s hardly exactly lively, and there are plenty of forces that could stand in the way of a speedy recovery.

“A very small rise in prices is the latest glimmer of hope for house prices.

“It comes on the back of news that mortgage approvals were up again in June – for the second consecutive month, and mortgage rates are continuing to weave their way gradually down.

“A combination of pay rises ahead of inflation, falling mortgage rates and keenly priced properties could start to reignite buyer enthusiasm in the coming months.”

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