Halifax: House prices rise at fastest pace since start of year

House prices rose by 0.4% in July, the biggest monthly increase since the start of the year.

The average UK property now costs £298,237, according to Halifax. The lender said house prices have risen by 2.4% over the past year, with Northern Ireland continuing to record the strongest annual price growth.

Amanda Bryden, head of mortgages at Halifax, says that while the national average is close to a record high, prices vary widely across the country depending on a number of factors, such as location and property type.

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She adds: “Challenges remain for those looking to move up or onto the property ladder. But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving.”

The UK housing market has been sluggish this year, with house price declines seen in February, March and May, according to Halifax’s house price index.

While Halifax says prices rose last month due to a resilient housing market and plenty of activity, Rightmove reports a “July slump”, with asking prices for UK properties falling by 1.2%, marking the biggest drop ever recorded by the firm.

However, the property website interprets the dip as showing that sellers are enticing buyers with more competitive deals during the traditionally slow summer period. The number of sales agreed upon is 5% higher than last year, suggesting realistic pricing is the key to selling a home.

Both sets of data are good news for a property market that has struggled with expensive mortgages and stamp duty hikes earlier this year.

We look at whether house prices will continue to rise in 2025, and which regions have seen the highest property price inflation so far.

Which regions have seen the highest house price growth?

Northern Ireland continues to be the strongest performing nation or region, with house prices rising by 9.3% over the past year (compared to a UK average of 2.4%). A typical home now costs £214,832.

Scotland also recorded positive house price growth in July, increasing by 4.7% with average prices now at £215,238.

Property prices in Wales saw a rise, up 2.7%, to an average of £227,928.

Among regions in England, the North West and Yorkshire and the Humber have the highest rate of property price inflation, up 4% over the past year to £242,293 and £215,532 respectively.

The South West, and London and the South East, continue to see moderate growth, with prices rising by just 0.2% and 0.5% respectively over the past 12 months. London remains the most expensive part of the UK. The average home in the capital costs £539,914.

What’s the outlook for UK house prices?

Most experts expect house prices to continue to rise this year. Halifax is forecasting “a steady path of modest gains through the rest of the year”.

The outlook will depend on whether the Bank of England cuts interest rates again, the supply and demand balance within the housing market, and affordability pressures.

Tomer Aboody, director of specialist lender MT Finance, comments: “Lower mortgage rates, combined with sellers pricing more sensibly even though the national average house price is close to a record high, is encouraging buyers to transact and take advantage of finding themselves in a reasonably strong position.

“With at least one more rate cut expected this year, both buyers and sellers are hoping for a strong second half of the year.”

Tom Bill, head of UK residential research at Knight Frank, notes that while the housing market is “getting back on its feet following the disruption of April’s stamp duty cliff edge”, high levels of supply are keeping prices in check.

“We expect low single-digit annual growth by the end of the year but that depends on the content of the Autumn Budget,” he added. “Some parts of the economy are already adopting the brace position and buyers could begin to hesitate after the summer if speculation over tax rises persists.”

Property buyers do have some good news in terms of falling mortgage rates and changes to mortgage rules.

Thomas Lambert, financial planner at Quilter, explains: “The Financial Conduct Authority has announced changes to its mortgage rules, easing affordability requirements for customers looking to switch to cheaper deals or reduce the term of their mortgage. Removing the need for a full affordability assessment in certain cases, such as reducing mortgage terms or switching to a more affordable product, should help borrowers make financially beneficial changes with less friction.”

The government’s new permanent 95% mortgage guarantee scheme will also help first-time buyers and home movers buy a home with a deposit of just 5%.