HOUSE prices rose by 0.8% in July following the Bank of England’s rate change, one of the UK’s biggest lenders has found.
The housing market has been pretty stagnant through out the first half of the year, but there are signs that growth is picking up.
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The average house price in the UK is £291,268, up over £2,200 compared to the previous month, Halifax said this morning.
Northern Ireland recorded 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.
The average price of a property in Northern Ireland is now £195,681.
Meanwhile, the house prices in the North West also recorded strong growth, up 4.1%, compared to the previous month, properties here now average £232,489.
Only homes in Eastern England have seen a knock, tumbling by 0.4% in July to £330,282.
The findings by Halifax mirror another closely watched report by fellow lender Nationwide.
The bank said that house prices in the UK rose by around 2.1% year-on-year in July, making it the fastest pace of growth since December 2022.
It follows news last week that the Bank of England cut interest rates from 5.25% to 5%, in a rare boost for wannabe homeowners.
The cut was important for buyers because high street banks and lenders use the BoE base rate to set their own interest rates on mortgages, loans and savings accounts.
So when it comes down, interest on mortgages rates and loans is likely to fall as well.
Already, the majority of major high street banks have their rates in response to the move.
NatWest also came out with a competitive five year fixed mortgage deal, offering 3.97% interest.
The deal comes with a £1,495 fee and just about beats Nationwide Building Society’s 3.99% as the lowest rate on the market.
Holly Tomlinson, financial planner at Quilter said the market may heat up as it enter the Autumn months.
She said: “A feeling that rates are going in the right direction though will help many people decide to take the leap back into the market, pushing up demand for homes.”
However the expert warned that many hopeful buyers could remain on the fence about fixing their mortgage now or waiting for rates to come down further.
Better days ahead?
Amanda Bryden, head of mortgages, Halifax, weighs up whether or not the housing market is showing signs of improvements
Last week’s Bank of England’s 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.
“Lots of clients in the midst of remortgaging or buying are considering tracker mortgages without early repayment charges, allowing them to benefit from future rate cuts with the option to fix when rates are lower,” she added.
“However, many people like the certainty of a fixed-rate deal.”
While rates appear to be coming down they still remain above what the market saw five years ago.
In 2019, the average five year fixed mortgage rate deal was 2.94%.
Experts at CBRE expect the same deal to 3.82% this year.
Mortgage rates have risen over the past few years in response to issues such as high inflation.
How much have house prices changed?
Here are average house prices and the annual change, according to Halifax.
Regional annual change figures are based on the most recent three months of approved mortgage transaction data:
East Midlands, £239,448, 0.6%
Eastern England, £330,282 minus 0.4%
London, £536,052, 1.2%
North East, £171,663, 2.6%
North West, £232,489, 4.1%
Northern Ireland, £195,681, 5.8%
Scotland, £205,264, 2.1%
South East, £386,468, 1.3%
South West, £301,359, 1.1%
Wales, £221,102, 3.4%
West Midlands, £253,649, 1.8%
Yorkshire and the Humber, £206,480, 1.8%
Different types of mortgages
We break down all you need to know about mortgages and what categories they fall into.
A fixed rate mortgage provides an interest rate that remains the same for an agreed period such as two, five or even 10 years.
Your monthly repayments would remain the same for the whole deal period.
There are a few different types of variable mortgages and, as the name suggests, the rates can change.
AÂ tracker mortgage sets your rate a certain percentage above or below an external benchmark.
This is usually the Bank of England base rate or a bank may have its figure.
If the base rate rises, so will your mortgage but if it drops then your monthly repayments will be reduced.
A standard variable rate (SVR) is a default rate offered by banks. You usually revert to this at the end of a fixed deal term, unless you get a new one.
SVRs are generally higher than other types of mortgage, so if you’re on one then you’re likely to be paying more than you need to.
Variable rate mortgages often don’t have exit fees while a fixed rate could do.