Halifax: UK house price growth approaches two-year high

Home-sellers are being rewarded for waiting out the market after Halifax data shows house price growth has approached a two-year high, it has been claimed.

The latest Halifax House Price Index shows annual growth hit 4.3% in August, the highest rate since November 2022.

Prices climbed 0.3% on a monthly basis, compared with 0.9% in July, putting average prices at £292,505.

The figures coincide with the interest rate cut in August although the data may reflect mortgage applications with Halifax from months beforehand.

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 North-West once again recorded the strongest house price growth of any region in England, up by 4.0% annually, while London remains the most expensive area now averaging £536,056, up just 1.5% annually.

Amanda Bryden, head of mortgages for Halifax, pointed out that the strong annual rise was due in large part to the comparison with weaker growth this time last year.

Bryden said:

“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, Bryden added that affordability remains a significant challenge for many potential buyers still adjusting to higher mortgage costs.

Bryden added:

“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.”

Commenting on the index, Guy Gittins, chief executive of Foxtons, said:

“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.”

Iain McKenzie, chief executive of The Guild of Property Professionals, suggested the market is heading for an “awesome autumn”.

McKenzie said:

“Market activity has been quietly picking up over the summer, and economic indicators are starting to point in the right direction.

“Headline inflation seems to be holding steady just over the 2% target by the Bank of England.

“It is worth noting that affordability concerns remain, as not all households are seeing living costs come down.

“It will be interesting to see how high-street banks react to interest rates creeping down.

“They are guilty of being cautious when it comes to passing immediate changes onto the consumer, so it may be a while until we see lower borrowing costs and more mortgage offers return to the market.

“A structural undersupply of housing remains in many parts of the UK, which continues to provide some support for prices.

“The new government’s priority of building new homes would increase supply, but would not have any sudden impact on driving prices down.

“Many buyers see the autumn months as the time to make a move, with families in particular keen to be in their new home for Christmas.

“We expect to see house prices rise between now and the end of the year.”

Nathan Emerson, chief executive at Propertymark, said:

“It is always encouraging to see enhanced levels of consumer confidence within the housing market, and we now appear to be firmly following a positive trend of growth once again.

“It is reassuring to witness the market moving forward from what has been a very fluid few years, where household affordability has been at near breaking point for many people.

“As the benefits of lower inflation and interest rates fully start to bed in, Propertymark is confident there will be further market growth as the year plays out.

“We are, however, keen to see the UK Government’s housebuilding programme spring into action to help alleviate the ongoing mismatch between supply and demand, as it is essential to keep pace with an ever-growing population.”

Kindly shared by Estate Agent Today