Find out if the market is still growing…
UK house prices rose month on month in July, going from an average of £266,064 in June to £266,334. This marks an increase of 0.3% and a 2.1% increase from the previous year, while below the all-time highs recorded in the summer of 2022.
|
Headlines |
July-24 |
June-24 |
|---|---|---|
|
Monthly Index* |
526.6 |
524.9 |
|
Monthly Change* |
0.3% |
0.2% |
|
Annual Change |
2.1% |
1.5% |
|
Average Price (not seasonally adjusted) |
£266,334 |
£266,064 |
* Seasonally adjusted figure monthly % changes are revised when seasonal adjustment factors are re-estimated)
Regarding the figures, Nationwide’s chief economist, Robert Gardner, had this to say: “Housing market activity has been holding relatively steady in recent months with the number of mortgages approved for house purchase at around 60,000 per month. While this is still 10% below the level prevailing before the pandemic struck, it is still a respectable pace given the higher interest rate environment.”
He also said that borrowers with a 25% deposit have faced interest rates of around 4.6% for a five-year fixed-rate mortgage, an increase compared to the 1.9% average interest rate recorded in 2019. Due to this, it has become more challenging for homebuyers to afford a mortgage since higher interest rates mean higher monthly mortgage payments.
“Investors expect Bank Rate to be lowered modestly in the years ahead, which, if correct, will help to bring down borrowing costs. However, the impact is likely to be fairly modest as the swap rates which underpin fixed-rate mortgage pricing already embody expectations that interest rates will decline in the years ahead,” he added.
Gardner also said that affordability will only gradually improve through a combination of wage growth outpacing house price growth and support from lower borrowing costs.
“This morning’s house price index from Nationwide suggests that the property market has regained some degree of consistency, with another small uptick in house prices reported in June,” said Holly Tomlinson, financial planner at Quilter. “UK house prices rose 0.3% month on month in July with the annual growth rate picking up to 2.1%, from 1.5% in June. This marks fastest pace of growth since December 2022.
“With the economic outlook looking more predictable, both buyers and sellers who have been treading water for the past few months are now re-entering the market and buoying prices.
“Now inflation has returned to the Bank of England’s target rate of 2%, a rate cutting cycle should start in the not-too-distant future. This should bolster the housing market as prospective buyers become more willing to purchase a property in a stable or dropping interest rate environment.”
