House prices have hit a two-year high after rising by 4.3% over the last year, according to the Halifax House Price Index.
The mortgage lender’s monthly data showed prices inched by 0.3% in August, compared to a 0.9% rise in July.
However, with prices rising over the year by the strongest rate since November 2022, it would seem the summer months have been positive for the housing market.
The average price of a UK property is now £292,505 compared to £291,585 in July, and this, said Halifax, is the highest since August 2022
Amanda Bryden, head of mortgages, Halifax, said the strong rate of growth was due, in large part, to the contrast with weaker growth this time last year.
“Recent price rises build on a largely positive summer for the UK housing market,” she continued.
“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, affordability remains a significant challenge for many potential buyers still adjusting to higher mortgage costs.
“However 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.”
Halifax’s data showed Northern Ireland once again had the strongest property price growth of any nation or region in the UK. Property price tags here rose by 9.8% annually. The average price of a property in Northern Ireland is now £201,043.
The North West recorded the strongest house price growth of any region in England, climbing by 4% over the last year to £232,917.
London continues to have the most expensive property prices in the UK, with values averaging £536,056 – this is an increase of 1.5% compared to last year.
Estate agents also reported this growing confidence means more buyers are entering the market.
Nicky Stevenson, managing director at national estate agent group Fine & Country, said: “With lower mortgage rates and easing financial pressures, more buyers are pulling the trigger on their moving plans. Meanwhile, more first-time buyers are stepping into the market after many were previously priced out by high repayment costs.
“While house prices are steadily rising, an increase in housing supply — up 14% year-on-year in August — should help control price inflation. The number of homes listed for sale is at a seven-year high, helping balance out rising demand.
“Possible tax increases in October’s budget may temper this momentum slightly, and affordability challenges continue to impact some buyers.
“Despite this, there is cautious optimism that the current strength of the property market will help it navigate these challenges and hopefully remain on a steady growth path.”
