House prices increased by +0.3% in August, after +0.9% rise in July and year-on-year prices are now up +4.3%, the strongest rate since November 2022, latest Halifax data reveals.
A typical property now costs £292,505 (compared to £291,585 in July), the highest level since August 2022. Northern Ireland continues to record the strongest property price growth of any nation or region in the UK, rising by +9.8% on an annual basis in August. The average price of a property in Northern Ireland is now £201,043.
House prices in Wales also recorded strong growth, up +5.5%, compared to the previous year, with properties now costing an average of £224,433.
Scotland saw a more modest rise in house prices, where a typical property now costs £205,144, +1.7% more than the year before.
The North West once again recorded the strongest house price growth of any region in England, up by +4.0% over the last year, to sit at £232,917.
London continues to have the most expensive property prices in the UK, now averaging £536,056, up +1.5% compared to last year.
POSITIVE SUMMER
Amanda Bryden, HalifaxAmanda Bryden, Head of Mortgages, Halifax, says: “House prices increased by +0.3% in August, following a rise of +0.9% in July, with the typical property now costing £292,505. Annual growth has risen to +4.3%, the strongest rate since November 2022, but this is due in large part to the comparison with weaker growth this time last year.
“Recent price rises build on a largely positive summer for the UK housing market. Prospective homebuyers are feeling more confident thanks to easing interest rates. That optimism is reflected in the latest mortgage approval figures, now at their highest level in almost two years.
“Such has been the resilience of house prices that the average property is now just £1,000 shy of the record high set in June 2022 (£293,507). While this is welcome news for existing homeowners, affordability remains a significant challenge for many potential buyers still adjusting to higher mortgage costs.”
And she adds: “However with market activity picking up and the possibility of further interest rate reductions to come, we expect house prices to continue their modest growth through the remainder of this year.”
AGENT REACTION
Guy Gittens, FoxtonsFoxtons Chief Executive, Guy Gittins, says: “The patience of UK home sellers is now being rewarded, as house prices are increasing consistently from one month to the next and at their fastest rate since 2002.
“This growth is being driven by an uplift in buyer activity and whilst this has been building since the start of the year, we’ve certainly seen it step up a gear since the general election.
“As a result, we’re seeing more enquiries and more offers made, with buyers also acting with greater confidence since interest rates were cut at the start of the month.
“All in all, the outlook remains a positive one for the remainder of the year and we expect a strong level of activity to persist as we move into autumn.”
Nigel Bishop, Recoco Property SearchNigel Bishop of buying agency Recoco Property Search says: “In August, more homeowners were motivated to put their property up for sale amid fears over an increase in Capital Gains Tax and Inheritance Tax in the upcoming Autumn Budget.
“As we are seeing more sellers entering the market, we predict buyer interest and activity to pick up further. Although this will create a more competitive market environment for house hunters, the influx of homeowners wanting to sell quickly will allow more room for price negotiations.”
Amy Reynolds, Antony RobertsAmy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “One small reduction in interest rates has translated into an instant response from the housing market during what is usually one of the quietest months of the year.
“In our offices, we have agreed a large number of sales in all price ranges as sellers were encouraged to reduce their pricing or seize the day and launch there and then, rather than wait for September.
“The markets are pricing in another rate cut in November, taking base rate to 4.75 per cent, but that is very late in the day to wait to launch a property as most people want to move by Christmas. September or October would be a better option, ensuring the price is as accurate as possible to enable a successful and timely sale.”
Verona Frankish, YopaVerona Frankish, Chief Executive of Yopa, says: “The property market really picked up the pace in August with respect to the annual rate of house price growth seen and there’s no doubt that this improving market sentiment has been spurred by the first cut to interest rates since 2020.
“Buyers are proceeding with a renewed level of confidence and with further interest rate cuts expected before the year is out, we anticipate that market activity and house prices will continue to improve over the coming months.”
Marc von Grundherr, Director of Benham and Reeves, says: “House prices continue to climb on both a monthly and annual basis and so far, it’s been a very solid summer for the UK property market, with both buyer and seller activity levels continuing to improve.
“The monthly rate of house price growth did slow in August, but this was only to be expected given that it’s summer holiday season and the real proof in the pudding is the annual rate of growth, which was the strongest seen since the back end of 2022.”
Jeremy LeafJeremy Leaf, north London estate agent and a former RICS residential chairman, says: “The market breathed a collective sigh of relief when first the election result ended lingering political uncertainty and again when interest rates started to fall.
“That added comfort is reflected in this solid, not spectacular, price growth figures from the country’s largest lender and reinforced by recent encouraging mortgage approval numbers.
“These show buyers and sellers did not panic but continued about their business over the summer. However, mortgages are still relatively expensive for many and talk of ‘a painful Budget’ by next Halloween is spooking many into holding off a little longer or at least negotiating harder to avoid what they regard as overpaying.”
BROKER AND LENDER REACTION
Mark Harris, SPF Private ClientsMark Harris, chief executive of mortgage broker SPF Private Clients, says: “The mortgage environment remains volatile, with lenders pulling deals and repricing at short notice. However, unlike a few months ago, the difference now is that mortgage rates are falling rather than rising, which is good news for affordability. Mortgage rates are at their lowest levels since March, with lenders continuing to reduce rates even though Swaps have plateaued.
“The biggest lenders are keen to attract new business, which is why we are seeing this frequent repricing downwards. Five-year fixes have now dipped below 3.8 per cent, initially for purchases and now for remortgages too. Furthermore, we are starting to see shorter-term products, such as three-year fixes, also edge below 4 per cent.
“How quickly or how far pricing will continue to fall by is a little more open to debate. For a significant period of time, the ‘normal’ rate environment has been between 1.5 and 2.5 per cent. However, borrowers coming off such products will find they are moving onto higher rates, although these are not as expensive as they would have been three months ago.
“As rates have fallen, we have seen activity noticeably increase. Estate agents report that August was busy as motivated movers who may have delayed for a while have got on with their transactions, while we have seen people take advantage of more palatable rates.”
Jonathan Samuels, Octane CapitalJonathan Samuels, Chief Executive of Octane Capital, says: “The housing market has certainly stabilised during the first half of this year with a hold on interest rates helping to reduce market uncertainty and we’re now seeing momentum start to build following the base rate reduction at the start of August.
“Of course, whilst positive for homebuyers, interest rates remain considerably higher than we’ve seen in recent years, so it’s certainly a case of not running before we can walk and not overborrowing prematurely based on hopes of future rate cuts.”
Tomer Aboody, MT FinanceTomer Aboody, director of specialist lender MT Finance, says: “With a further positive uptick in house prices compared with last year, this demonstrates the confidence among buyers who are taking advantage of lower mortgage rates.
“With the prospect of a further rate cut from the Bank of England in the offing, we are hoping to see higher transaction volumes in the final quarter of the year, although a potentially tough Budget in October could deflate the bubble or at the very least, limit that budding confidence.”
And Maeve Ward, Head of Intermediary Sales at Together Money, says: “The housing market has continued to improve in August, with prices rising by 0.3% in August as buyer and seller confidence continues to remain strong – even throughout the peak holiday season.
Maeve Ward, Together Money“With the Bank of England recently announcing its first rate reduction since 2021 and the next announcement due in a fortnight, we should see a continuation of rates among highstreet lenders falling, albeit at a slower pace than before until the next mini-budget.
“Indeed, to re energise any meaningful economic growth, it’s very likely Labour will be looking for higher levels of public investment to bring about increased private investment in the economy and use the looming budget to make this clear. This will hopefully include more funding into house building, which should positively impact the market.
“While this is encouraging, rate cuts may take longer to fall than initially predicted, so those eager to move forward with their plans may want to explore the range of financial products and schemes available. First time buyers can look at taking advantage of Shared Ownership, and for those looking for fast and flexible finance to jump on an opportunity, there is the option of bridging loans. Speaking to a professional mortgage advisor is a great way to assess all the options available before making a final decision.”
