In a surprising turnaround, UK house prices experienced a notable increase in July following three months of stagnation, according to data released on Wednesday by Halifax.
The latest figures show a 0.8% rise in house prices for the month, significantly exceeding the anticipated growth of 0.3%. On an annual basis, house prices climbed by 2.3% in July, up from a 1.9% increase in June, marking the highest annual growth rate since January 2024. The average house price now stands at £291,268, compared to £289,042 in June.
Amanda Bryden, head of mortgages at Halifax, commented on the development: “Last week’s Bank of England Base Rate cut, along with recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home, or move up the housing ladder. However, affordability constraints and a shortage of available properties continue to challenge prospective homeowners.”
Bryden added, “With 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.”
Ashley Webb, a UK economist at Capital Economics, also weighed in: “After three months of stagnation, the larger-than-expected rise in the Halifax house price index in July indicates that house prices are rebounding from the slight increase in mortgage rates seen in the first half of this year. Moreover, the recent decline in the 2-year interest swap rate from 4.25% at the end of July to 4.08%, driven by investors’ concerns over a US recession, presents an additional upside risk to our forecast for house prices to grow by just 1.0% in 2024.”
The unexpected growth in house prices brings a sense of cautious optimism to the market, as stakeholders look to see if this upward trend will persist amidst ongoing economic uncertainties.