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

The average UK house price jumped 0.4% in July, reaching £298,237, close to a record high, new house price index data shows. Will property prices increase further this year?

Colourful townhouses in Portrush, Northern Ireland
Northern Ireland continues to record the strongest annual price growth, according to Halifax
(Image credit: Getty Images)

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.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

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.

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%.

Ruth Emery
Contributing editor

Ruth is an award-winning financial journalist with more than 15 years' experience of working on national newspapers, websites and specialist magazines.


She is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times. 

A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service. 

Outside of work, she is a mum to two young children, while also serving as a magistrate and an NHS volunteer.