July Housing Price Index: Average UK House Prices Increase by £2,200
National house prices surged by almost 1 percent last month, thanks to the Bank of England’s interest rate cuts, providing a fresh ray of hope for the housing market.
The average house price in the UK rose by over £2,200 in July, following three relatively stagnant months as per a housing price index released by Halifax.
Halifax reported a 0.8 percent increase in house prices month-on-month and a 2.3 percent rise annually.
July’s average house price across the UK stood at £291,268, compared to £289,042 in June.
With a 5.8 percent annual growth, Northern Ireland continued to lead in house price appreciation, with the average property cost now at £195,681.
Strong Growth
In the North West, house prices saw a robust growth of 4.1 percent compared to the previous year, averaging at £232,489.
Wales witnessed a 3.4 percent increase in house prices, reaching £221,102, the highest since October 2022.
Scotland also experienced a rise in house prices, with the average property cost now at £205,264, up by 2.1 percent year-on-year.
However, Eastern England was the only region in the UK to see a decline, with properties averaging at £330,282, down by 0.4 percent annually.
Notably, London maintained its position as the most expensive in the UK, with an average property price of £536,052, up by 1.2 percent from the previous year.
The recent House Price Index data released by Halifax follows the Bank of England’s interest rate cut announcement last Thursday.
The BoE’s decision marked the first interest rate cut in over four years, driven by easing inflationary pressures.
Interest Rates Slashed
The Monetary Policy Committee (MPC) meeting saw interest rates being slashed from 5.25 to 5 percent.
“Last week’s Bank of England’s 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,” said Amanda Bryden, head of mortgages at Halifax.
Bryden also highlighted the challenges posed by affordability constraints and limited property availability for prospective homeowners.
Predicting a modest upward trend in house prices for the remainder of the year, Bryden stated, “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.”
Tom Bill, head of UK residential research at Knight Frank, mentioned the pent-up demand created by early summer disinterest due to elections, which is expected to drive activity in the autumn market.
He also predicted an average UK house price growth of 3 percent in 2024, owing to the recent rate cut and potential future cuts.
‘Finely Balanced’
After the rate cut announcement, Governor Andrew Bailey described the decision as “finely balanced,” amid the UK economy’s recent strength and inflation staying on target.
Following a period of high inflation rates, current stability indicates a more favorable outlook for the economy.
Chancellor Rachel Reeves welcomed the rate cut but cautioned about the challenges faced by many due to higher mortgage rates post the previous government’s decisions.
Evgenia Filimianova contributed to this report.
