"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."
- Amanda Bryden, head of mortgages at Halifax
House prices increased by 0.8% in July, following three relatively flat months, the latest Halifax house price index shows.
As a result, the annual growth rate of 2.3% is the highest recorded since January 2024.
Northern Ireland continues to record the strongest property price growth of any nation or region in the UK, rising by 5.8% on an annual basis in July, up from 4.1% the previous month and the highest increase since February 2023.
House prices in the North West also recorded strong growth, up 4.1% compared to the previous year, while Scottish house prices rose by an average of 2.1% and in Wales, house prices grew 3.4% to £221,102 - the highest price seen since October 2022.
The only region or nation to record a fall across the UK was Eastern England. Properties here now average £330,282, down by 0.4% on an annual basis.
London continues to have the most expensive property prices in the UK, now averaging £536,052, up 1.2% compared to last year.
Amanda Bryden, head of mortgages at Halifax, said: “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.”
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The property market has seen more twists and turns in the past year than a Simone Biles gymnastics routine, so it’s positive to see some consistent but modest growth.
“The 0.8% monthly increase and 2.3% annual growth rate are encouraging signs, especially considering the economic challenges we've faced over the past year. With the average house price now at £291,268, we're seeing a gradual but steady appreciation in property values.
“It's particularly heartening to see strong performance in regions like Northern Ireland and the North West, which have recorded impressive annual growth rates of 5.8% and 4.1% respectively. This regional variation highlights the diverse nature of the UK property market and the opportunities available across different areas.
“The recent Bank of England base rate cut and reductions in mortgage rates are positive developments for the market. These factors should help improve affordability for many potential buyers, especially first-time buyers who have been struggling to get onto the property ladder. However, we must acknowledge that affordability constraints and limited housing stock continue to pose challenges.
“We're optimistic about the market's direction for the remainder of the year. The combination of lower mortgage rates, potential further base rate reductions, and steady price growth creates a favourable environment for both buyers and sellers."
Jeremy Leaf, north London estate agent and former RICS residential chairman, added: "Such strong results from an historically-accurate indicator of house-price movements reflects what was happening before the recent interest rate change, despite the election uncertainty. The housing market is continuing to show its resilience.
"The recent drop in base rate is already having an impact in terms of generating new interest and accelerating existing transactions, even at a time when the market is usually on holiday.
"However, that fall was anticipated for such a long time that it has already been factored in by most buyers and sellers so we do not expect fireworks over the next few months, rather a steady uplift.”
