Renewed momentum in the property market has seen UK house prices rise at the highest rate since January, ending a three-month spell of stagnation.
House prices increased by 0.8 per cent in July, with the average property now costing £291,268, up from £289,042 in June, according to the Halifax house price index. This surge sets the annual growth rate at 2.3 per cent.
This comes after the Bank of England cut interest rates last week, ending months of an elevated position. Many prospective property buyers and sellers had been holding off for interest rates to come down, as it would have an impact on mortgages and borrowing.
The Monetary Policy Committee cut them by just 25 basis points, and the decision was split by five votes to four. Andrew Bailey, its governor said: “What matters for our policy decisions is the accumulation of evidence about the medium term outlook for inflation,” indicating the Bank would remain cautious..
London remains the priciest area in the UK, with average property prices now at £536,052, – a 1.2 per cent rise from last year.
Northern Ireland saw the strongest house price growth in the UK, with prices soaring by 5.8 per cent annually in July, up from 4.1 per cent in June—the highest rise since February 2023.
The average property price in Northern Ireland now stands at £195,681.
House prices in the North West surged by 4.1 per cent compared to last year, bringing the average property price to £232,489. In Wales, prices climbed by 3.4 per cent to reach £221,102—the highest since October 2022.
Scotland also saw an increase, with the average property now costing £205,264, up 2.1 per cent from the previous year.
Eastern England was the only region to see a decline, with property prices averaging £330,282, down 0.4 per cent annually.
Amanda Bryden, head of mortgages at Halifax, said: “In July, UK house prices increased by 0.8 per cent on a monthly basis, following three relatively flat months.
“The average house price in the UK is £291,268, up over £2,200 compared to the previous month. Annual growth rose to 2.3 per cent, the highest rate since the start of this year.
“Last week’s Bank of England base rate cut, which follows recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home or move along the housing ladder.
“However, affordability constraints and the lack of available properties continue to pose challenges for prospective homeowners.
“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.”