According to the latest Halifax House Price Index, the average property price stood at £298,237, which is up from £297,157 in the prior month.
On a monthly basis, house prices increased by 0.4%, which is the largest monthly increase since the start of the year.
From a quarterly perspective, house prices contracted by 0.1%, according to the report.
Northern Ireland was the strongest performing nation or region in the UK, with house prices rising by 9.3% over the past year, with the typical home coming to £214,832.
House prices in Scotland saw house price growth of 4.7%, with average prices standing at £215,238.
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Property prices in Wales went up by around 2.7% to an average of £227,928, according to Halifax.
Looking at England, the North West and Yorkshire and the Humber have the highest rate of house price inflation at 4%, with average house prices coming to £242,293 and £215,532 respectively.
The South West and the South East saw moderate growth, increasing by 0.2% and 0.5% respectively, with London topping the table as the most expensive region, with the average property price coming to £539,914.
Amanda Bryden, head of mortgages at Halifax, said that while the national average remains close to a record high, it’s worth remembering that “prices vary widely across the country depending on a number of factors, not least location and property type.”
She continued: “Challenges remain for those looking to move up or onto the property ladder. But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving.
“Combined with the more flexible affordability assessments now in place, the result is a housing market that continues to show resilience, with activity levels holding up well. We expect house prices to follow a steady path of modest gains through the rest of the year.”
Bryden added that in the second half of the year, there would be a “notable rise” in homeowners coming to the end of fixed rate deals taken out during the “pandemic-era property boom”, when there were ultra-low interest rates and soaring house prices.
“While most borrowers coming to the end of five-year fixed rate mortgage deals will see their monthly repayments rise, the extent of this will vary across households. Those coming off a two year fixed rate are very likely to see their monthly payments come down, as they originally locked in rates during the peak that followed the 2022 mini Budget.
“We’re unlikely to see a significant impact on house prices, but it may influence market dynamics if prospective homemovers choose to delay plans as a result of tighter budgets,” she added.
Buyers have ‘shaken off concerns’ about higher taxes and are going ahead with sales
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said the house price data suggests that buyers have “shaken off concerns about higher property taxes and are pushing ahead with purchases as summer stock levels rise”.
She continued on to say that housing market activity was picking up, which was driven by increased listings, easing borrowing costs and a relaxation of mortgage lending rules.
“Some buyers may be hoping for another interest rate cut later today from the Bank of England – a move that could further improve affordability levels.
“At a time when inflation appears to be creeping upwards, a quarter-point cut – the fifth since August last year – may seem like a curious decision from the rate-setting Monetary Policy Committee. However, the move reflects a delicate balancing act between curbing rising prices and boosting demand,” Haine explained.
She noted that inflation had increased to 3.6% in the 12 months to June, above the Bank of England’s target of 2%, and the unemployment rate is the highest in almost four years.
“Add to that subdued economic growth and a host of global headwinds – as US tariffs and geopolitical tensions continue to disrupt trade flows and fuel price pressures – and the challenge facing the Bank of England becomes clear: how to support domestic demand without reigniting inflation,” Haine explained.
She continued on to say that for buyers, a base rate cut would be “welcome news”, especially for those looking to refinance and first-time buyers.
“Some mortgage holders, such as those on tracker deals or those emerging from two-year fixes when rates were higher, may see repayments go down. Others emerging from ultra-low fixed rate deals secured during the post-pandemic property boom, and before interest rates began rising in December 2021, are still likely to face higher monthly costs.
“Anyone preparing to buy with a mortgage – whether upsizing, downsizing or stepping onto the property ladder for the first time – should find an independent broker to source the best options for their needs,” she said.
Haine concluded that the “summer selling season” was in “full swing”, with listings on the rise as second homeowners and buy-to-let (BTL) landlords “head for the exit to escape higher tax bills, now could be a good time to secure a discount”.
“For sellers, realistic pricing may be key if they want to secure a prompt sale,” she noted.
