Annual UK house price growth stood at 8.3% in the 12 months to July, according to the Zoopla House Price Index.

The latest figure is consistent with the growth in the year to June, when prices had also risen by 8.3%, or £19,800, over the previous year.

Zoopla revealed that the South West and Wales are jointly the best performing regions, with annual house price growth of 10.6%. The property expert stated that demand and healthy volumes of new sales agreed in the first half of the year are continuing to support the headline rate of growth.

New sales agreed remain in line with last year while stock levels have started to rebuild off a low base, trends that have boosted choice for buyers. Zoopla’s date also showed that the average UK estate agent has 14 homes for sale, a figure up from a low of less than 12 in the spring but below the pre-pandemic level of 20.

“The lack of a material overvaluation in UK home values means mortgage rates rising to 4% are not, on their own, sufficient to result in UK-wide price falls,” Zoopla research director, Richard Donell, said.

According to Zoopla index, buyer demand is registering the “usual summer slowdown” and is now underperforming against last year, as economic uncertainty increases amid record levels of inflation and rising interest rates.

Commenting on the latest Zoopla data, senior personal finance analyst at Hargreaves Lansdown, Sarah Coles, added: “Demand is still above the five-year average, but it has started to drop back, and is now less than a third of what it was in the spring. It takes around three months for agreed sales to translate into completions, so house price figures being announced at the moment reflect demand back then. It means we can expect significant changes in the months to come.

“Part of the problem is that a combination of soaring house prices and hikes in interest rates are pricing first-time buyers out of the market. Those in housing hotspots are feeling particular pressure. Meanwhile, although rents have been rising, the pace of mortgage hikes means that in more expensive areas, the cost of repaying the mortgage could increasingly overtake the cost of renting. This is likely to dampen demand from first-time buyers even further.

“First-time buyers are the engines of the housing market, particularly at the moment when they make up just over a third of all sales. When they get cold feet, it seizes up the rest of the market, so those who want to move up their ladder find it impossible to shift their old property, and are stuck in limbo.”

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