House prices rose in July, according to the latest figures from Halifax, as falling mortgage rates helped to galvanise the market.
The average home increased in value by 0.8 per cent between June and July, representing a £2,200 monthly uplift.
Year-on-year, house prices were up by 2.3 per cent, which is the highest it has been in 2024 so far.
The average home is now worth £291,268, up from £289,042 in June.
Bumper month: Average house price is £291,268, up £2,200 compared to the previous month
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.
‘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.’
Halifax’s figures, which are based on its own mortgage lending, chime with Nationwide’s house price data from last week.
Britain’s biggest mutual revealed the average house price rose by 0.3 per cent between June and July and said that annually, house prices were up by 2.1 per cent.
Experts said falling interest rates and mortgage rates had led to the uplift.
Nicky Stevenson, managing director at national estate agent group Fine & Country said: ‘The Bank of England’s recent rate cut is set to further energise the property market as we enter the second half of 2024.
‘In response, lenders have ignited a rate war, slashing offers to stay competitive. This shift is a game-changer for prospective buyers.
‘Lower rates translate to reduced monthly payments and increased purchasing power, potentially opening doors for those previously priced out.’
Game changer: The Bank of England cut the base rate from 5.25% to 5% on 1 August
Regional divide remains
Northern Ireland continues to record the strongest property price growth of any nation or region, rising by 5.8 per cent year-on-year, according to Halifax.
House prices in the North West also recorded strong growth, up 4.1 per cent, compared to the previous year.
In Wales, house prices grew 3.4 per cent to £221,102 which is the highest price seen since October 2022.
Scotland saw a rise in house prices of 2.1 per cent more than the year before.
The only region or nation to record a fall across was Eastern England. Properties here now average £330,282, down 0.4 per cent compared to last year.
Iain McKenzie, chief executive of The Guild of Property Professionals said: ‘It’s particularly heartening to see strong performance in regions like Northern Ireland and the North West.
‘This regional variation highlights the diverse nature of the UK property market and the opportunities available across different areas.’
What next for house prices?
At the start of the year, almost every major forecast was suggesting prices would fall over the course of 2024.
Now, almost every commentator across the property sector is convinced the only way is up.
‘UK house prices have found their mojo again,’ said Anthony Codling, head of European housing and building materials for investment bank RBC Capital Markets.
‘The value of the average house has increased by £6,650 over the last 12 months.
‘Last week we saw the first bank rate cut, and we believe that mortgage rates will trend down over the coming months.
‘If we throw into the mix wages rising and cost of living pressures easing it looks likely that house prices will continue to rise.’
Aside from the price of the average home rising, there are fresh signs of the market gradually moving from a buyers to a sellers market again.
How quickly are houses selling?
Almost a quarter of homes that came onto the market in the first half of July went under offer within two weeks, according to separate data from the estate agent Hamptons.
This is up from 15 per cent during the same period in 2023 and up from 19 per cent between January and June this year.
The share of sellers accepting big discounts on their asking price has also fallen to the lowest level since mortgage rates spiked at the end of 2022.
Just 2.2 per cent of sellers in England and Wales accepted an offer which was more than 10 per cent below their final asking price in July, down from a peak of 5.1 per cent in December 2022.
And rising house prices and lower mortgage rates have meant that fewer sellers are having to reduce their asking price.
Some 46 per cent of homes sold across England & Wales in July had a price reduction, slightly down from 47 per cent in June this year and 56 per cent in October 2023 when price reductions peaked.
Jonathan Hopper, chief executive of buying agent Garrington Property Finders said: ‘More recent anecdotal evidence shows that estate agents are starting to see buyer enquiries pick up as consumer confidence rises.
‘In some areas the number of homes for sale is high compared to the number of buyers, and this imbalance is making it an out and out buyer’s market.
‘Nevertheless, the prospect of cheaper mortgages is finally here, and many would-be buyers who had been holding off are asking themselves the question ‘if not now, then when?’
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