House prices in the latest three months were 3 per cent higher than in the preceding three months and 9 per cent higher than in the same three months a year earlier, according to Halifax’s latest house price index.
The average monthly costs associated with buying a three bedroom house in the UK for a first-time buyer were £56 less than the typical monthly rent paid.
The research also found the average price for a home in the UK was £204,674 - a monthly increase of 2.7 per cent.
Martin Ellis, Halifax’s housing economist, said: “This measure of the underlying rate of house price increased from last month’s 2.5 per cent, but remained below June’s 3.3 per cent.”
He explained that the shortage of secondhand properties for sale on the market is resulting in upward pressure on house prices, while the economic recovery, real earnings growth and very low mortgage rates are also supporting housing demand.
“Strengthening demand and highly constrained supply are likely to mean that house price growth continues to be robust in the short-term.”
The lender’s analysis also suggested that home sales fell by 4 per cent between June and July, but remained above 100,000 for the second successive month, at 100,720. In contrast, sales were consistently below 100,000 between October 2014 and May 2015.
Meanwhile, mortgage approvals rose again in July, up 3 per cent to the highest level since February 2014.
Approvals in the three months to July were 5 per cent higher than in the preceding three months and 4 per cent higher than in the same three months last year, based on Bank of England figures.
Jonathan Adams, director of prime central London estate agency Napier Watt, noted that the market is becoming fragmented, with higher-value properties struggling to sell as international buyers become more fickle and scared off by the tax incurred when purchasing high value residential property.
“As the average UK resident would look to move their bank account to the most favourable interest rate, financially mobile international buyers are free to move their property investment to whatever jurisdiction and investment opportunity best presents itself.”