House prices in the three months leading to July increased by 3.3% compared to the same period a year earlier, with the average house price rising and hitting a new record of £230,280, according to the most recent Halifax House Price Index.
When looking at the level of growth on a monthly basis, property prices increased by 1.4% in July compared to June, while quarterly prices were 1.3% higher than in the preceding quarter.
Commenting on the findings, Halifax managing director Russell Galley said: “House prices picked up in July, with the annual rate of growth rising from 1.8% in June to 3.3% in July, the largest increase since last November. The average house price is now £230,280, the highest on record. House prices in the three months to July were 1.3% higher than in the previous quarter, the fastest quarterly increase, again, since November.”
Despite the increase in property prices in July, Galley noted that housing activity remains “soft” and, though there has a been a “modest” improvement in mortgage approvals, the latest survey data indicated that new buyer enquiries and agreed sales will remain “broadly flat” for the rest of 2018.
“In contrast, the labour market remains robust, with the numbers of people in employment rising by 137,000 in the three months to May with much of the job creation driven by a rise in full-time employment. Pressures on household finances are also easing as growth in average earnings continues to rise at a faster rate than consumer prices.
“With regards to the recent rise in the Bank of England Base Rate, we do not anticipate that this will have a significant effect on either mortgage affordability or transaction volumes,” he added.
Legal & General mortgage club director Kevin Roberts highlighted that, despite housing prices moving at a “sustainable rate”, the positive effects are not “necessarily being felt by everyone” that is house hunting.
“A lack of housing continues to challenge many would-be buyers. This barrier, and the ongoing struggle many younger buyers face trying to save while renting, is forcing thousands to rely on the Bank of Mum and Dad, Help to Buy, or in some cases both. These additional sources of funding are certainly vital, but they also show the severity of our housing crisis – particularly for those who don’t have a ‘BoMaD’ to rely on. Until the thousands more affordable homes we need are built, these individuals will only continue to view homeownership as a dream, not a reality.”
Subscribe to our newsletter to receive breaking news by email.