A 0.4% increase in house prices announced by Halifax has been welcomed as good news for consumers, with the building society saying it expects modest gains to last throughout the year. With easing mortgage rates, rising wages and more flexible affordability assessments, the result is ‘a housing market that continues to show resilience’.
‘Challenges remain for those looking to move up or onto the property ladder’, Halifax head of mortgages Amanda Bryden acknowledged. ‘But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving’.
The increase in July reflects the highest rise this year, taking the average property price to £298,237. The annual growth rate is 2.4%, down slightly from 2.7% in June. However, despite the high national average, prices vary widely across the regions.
Northern Ireland continues to record the strongest annual price growth in the UK, up 9.3% to £214,832. Scotland and Wales also saw increases, up by 4.7% and 2.7% respectively. In English regions, the North West continues its pattern of high inflation, reaching 4% over the last year to take the average price to £242,293. Yorkshire & the Humber also continues its positive run, up 4% to £215,532.
In the South West, London and the South East, however, prices rose by just 0.2% and 0.5% respectively. Despite the marked differences in regional increases, London remains the most expensive part of the UK – with the average home now costing £539,914.
Anthony Codling, managing director of equity research at RBC Capital Markets, said the national increase ‘defies the doom sayers’. He added:
“House builders have been saying that prices are stable rather than rising and some have been worried that rising stock levels are reducing prices.
“At a national level, these supply fears appear unfounded to us. It is fair to say that homebuyer confidence is fragile especially with increasing talk of autumn tax rises, but for now enough people who want to move can move and prices continue to edge up suggesting demand remains ahead of supply.”
Iain McKenzie, CEO of The Guild of Property Professionals, said the ‘modest but welcome’ rise is another sign of a steadily recovering market. ‘The engine room of this recovery is undoubtedly improved affordability’, he noted.
“With mortgage payments for first-time buyers returning towards their long-term average and lenders offering more competitive rates, buyer confidence is being rebuilt on solid foundations. This is translating directly into action, with agreed sales and mortgage approvals both showing healthy year-on-year growth.”
