July saw UK house prices jump to 0.8%, reaching an average property price of £291,268. With mortgage rates projected to stay lower for longer, the housing market is expected to rise stronger throughout the year. This is coming on the back of slow growth, and experts foresee moderate rises in a future ahead.

UK home prices have surged for the month of July. According to these lenders, the average price for homes in the UK increased by 0.8% to £291,268 from June’s average of £289,042. This is coming after a number of months when the increases have been very small indeed and fall into the range of 0.1% to 0.2%.

The annual growth rate of house prices has also risen to 2.3%, the highest since January this year. This should cheer house sellers and buyers equally, as it means the market is becoming more and more active.

Lower Mortgage Rates Help Boost Prices

Mortgages at Halifax are headed by Amanda Bryden. Commenting on the situation, she expressed that the Bank of England’s base-rate cut that came just a week ago, along with the lowering of mortgage rates by major lenders, does provide a ray of hope in the housing market. It was the first cut in over four years. It is the principal reason that many other enormous banks, such as Halifax, NatWest, and Santander, have jointly cut their reductions on mortgage rates by up to 0.20 percentage points. Nationwide, the biggest UK lender, now offers some new buyers a mortgage rate of less than 4%.

Bryden said, “With lower mortgage rates and the possibility of more base rate cuts, we expect house prices to keep rising, though at a modest pace, for the rest of this year.”
Buyers’ Confidence Grows

The interest rate cut set by the Bank of England acted as a platform that continuously pushed up interest in the housing market. According to Sam Mitchell, CEO of Purplebricks, “The interest rate cut has made buyers more confident, and many who were waiting are now going ahead with their plans to buy homes.”

However, it is to be remembered, while it may be so, mortgage rates are lower comparatively and in recent years, but they are still up and went higher than where they prevailed earlier and immediately before and after the coronavirus pandemic. Thus, affordability and availability of properties still seem problematic to many purchases interested in buying homes.

Regional Differences in House Prices

In the capital, an average price for a residential property persists at an average of £536,052—with a 1.2% increase year-on-year. In Northern Ireland, the biggest change in house prices occurred, with the average price rising to £195,681 in July, up by 5.8%. The north-west of England also saw substantial growth, with the prices rising to £232,489, a 4.1% increase.

Amy Reynolds, head of sales at Antony Roberts estate agency based in Richmond, London, said: ‘Good surprisingly start to August. Believes that this has been due in part to the recent Interest rate drop, along with getting over the election, which has drawn more buyers and sellers into the market.

Potential Pitfalls

“Despite the positive trends,” Reynolds had a little warning to any potential buyer. Lower mortgage rates can result in higher asking prices for homes, as more people start looking to buy with cheaper mortgage rates, resulting in competition that may drive up prices.

Overall there are some encouraging signs of recovery and growth in the UK housing market. Mortgage rates that are lower and a recent base rate cut by the Bank of England are helping to reciprocate buyer and seller confidence. However, challenges in regard to affordability and the availability of homes still exist. It will be of interest as the year progresses to see just how these impacts on the market and whether the surge in house prices carries on moving upwards.

Conclusion: The important revolution in the UK housing market was seen as house prices gained and mortgage rates eased down in July, which leaves a better and more advantageous situation for both buyers and sellers alike. However, this does not mean that one will take their eyes off the persistent challenges and the way in which it is expected for the market to evolve in the coming months.