UK house prices jumped by more than £1,000 in July, marking the biggest monthly increase this year as the property market shows continued resilience despite ongoing affordability challenges.
The average house price rose by 0.4% to £298,237, up from £297,157 in June, according to Halifax. This represents a cash increase of £1,080 and leaves prices 2.4% higher than a year ago.
Market shows growing resilience
Amanda Bryden, head of mortgages at Halifax, said the national average remains close to a record high but prices vary widely across the country depending on location and property type. She noted that challenges remain for those looking to move up or onto the property ladder.
However, Bryden highlighted that mortgage rates continue to ease and wages are still rising, meaning "the picture on affordability is gradually improving". Combined with more flexible affordability assessments now in place, this has resulted in a housing market that continues to show resilience with activity levels holding up well.
Northern Ireland leads price growth
Northern Ireland continued to be the strongest-performing area, with house prices typically rising by 9.3% annually. In Scotland, property values rose by 4.7% and in Wales they increased by 2.7% on average.
In England, the North West and Yorkshire and the Humber recorded the strongest annual property price inflation at 4.0%. London saw more modest growth with prices rising just 0.5% annually to an average of £539,914.
Experts predict steady growth
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said housing market activity is picking up, driven by increased listings, easing borrowing costs and a relaxation of mortgage lending rules.
Thomas Lambert, a financial planner at wealth manager Quilter, noted the improvement comes despite the lingering impact of stamp duty threshold changes earlier in the year. He warned that many households remain constrained by high living costs and sluggish income growth.
Lenders adapt with competitive products
Nathan Emerson, chief executive of property professionals' body Propertymark, said lenders are adapting to market trends by offering more competitive products. Amy Reynolds, head of sales at London-based estate agency Antony Roberts, reported that serious buyers are committing and keen to move before the end of the year.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said mortgage rates continue to edge downwards but it's not just pricing that is improving. Lenders are also broadening policy, including increasing loan-to-income caps and lowering some income requirements, which is boosting affordability.
Autumn budget could impact market
Tom Bill, head of UK residential research at Knight Frank, said the UK housing market is getting back on its feet following the disruption of April's stamp duty cliff edge. However, high levels of supply are keeping prices in check.
Bill expects low single-digit annual growth by the end of the year but warned this depends on the content of the autumn budget. He noted that buyers could begin to hesitate after the summer if speculation over tax rises persists.
Regional price variations revealed
Halifax data shows significant regional variations across the UK housing market. The East Midlands recorded an average house price of £245,182 with 2.4% annual growth, while Eastern England saw £334,494 with 1.1% growth.
The North East remains the most affordable region at £177,251 with 3.2% annual growth. The South East commands £388,260 with modest 0.5% growth, whilst the South West averages £302,306 with just 0.2% annual increase.
- East Midlands: £245,182 (2.4% annual growth)
- Eastern England: £334,494 (1.1% annual growth)
- London: £539,914 (0.5% annual growth)
- North East: £177,251 (3.2% annual growth)
- North West: £242,293 (4.0% annual growth)
- Northern Ireland: £214,832 (9.3% annual growth)
- Scotland: £215,238 (4.7% annual growth)
- South East: £388,260 (0.5% annual growth)
- South West: £302,306 (0.2% annual growth)
- Wales: £227,928 (2.7% annual growth)
- West Midlands: £260,265 (2.6% annual growth)
- Yorkshire and the Humber: £215,532 (4.0% annual growth)
Halifax expects house prices to follow a steady path of modest gains through the rest of the year as the market continues to show resilience despite ongoing challenges for buyers.
(PA/London) Note: This article has been edited with the help of Artificial Intelligence.
