UK House Prices See Increase in July, Halifax Reports
According to one of the UK’s largest mortgage lenders, Halifax, house prices rose by 0.8% in July, following three months of stagnation in the market. The average cost of a home increased by over £2,200 to £291,268 last month, compared to June. This month-on-month increase exceeded expectations, as economists had predicted a rise of only 0.3%, according to a Reuters poll.
Halifax also reported a 2.3% growth in annual prices, in line with the Bank of England’s decision to cut interest rates on August 2nd for the first time in over four years. The quarter percentage point reduction to 5% came after the period covered by Halifax’s figures.
Amanda Bryden, head of mortgages at Halifax, stated: “Last week’s cut, which follows recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home, or move up the housing ladder.” However, Bryden cautioned that affordability constraints and a lack of available properties continue to pose challenges for prospective homeowners.
She added: “Against the backdrop of lower mortgage rates and potential further base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year.”
On a regional basis, Halifax reported strong growth in the North West, where month-on-month prices increased by 4.1%. The average property in this region is now priced at £232,489. Meanwhile, London maintains its position as the most expensive area for property prices, with an average home costing £536,052.
Economist Ashley Webb from research firm Capital Economics stated that the nationwide rise in house prices is “further evidence that prices are bouncing back from the slight rise in mortgage rates in the first half of this year.” He also suggested that the Bank of England may cut interest rates again sooner than expected, potentially leading to a quicker acceleration in house price growth.
Sam Mitchell, chief executive of online estate agents Purplebricks, also commented on the impact of the interest rate cut, stating: “The growing confidence we’ve seen take hold of the housing market in recent weeks has been supercharged by the Bank of England’s decision.” Mitchell noted that lenders have already responded by slashing mortgage rates, leading to increased buyer activity after months of hesitation.
As the housing market shows signs of recovery, the impact of the Bank of England’s interest rate cut continues to be felt. With expectations of further reductions in the base rate, the future of the UK housing market remains uncertain.
