Property 

House prices pick up in July

House prices pick up in July

The average house price hit a record high of £230,280 in July, according to the latest Halifax house price index released today (7 August).

The annual rate of house price growth rose from 1.8 per cent in June to 3.3 per cent in July, the biggest increase since November 2017.

House prices rose on a monthly basis by 1.4 per cent in July and quarterly by 1.3 per cent - but Russell Galley, managing director at Halifax, said overall housing activity remained soft.

He said: "Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year.

"In contrast, the labour market remains robust, with the numbers of people in employment rising by 137,000 in the three months to May with much of the job creation driven by a rise in full-time employment - pressures on household finances are also easing as growth in average earnings continues to rise at a faster rate than consumer prices."

Mr Galley anticipated the recent rise in the Bank of England base rate would not have a significant effect on either mortgage affordability or transaction volumes.

Despite the promising figures, experts were sceptical about what July's strong performance would mean for the housing market in the months to come. 

Jonathan Hopper, managing director of Garrington Property Finders, said the market has seen far too many false dawns to allow itself to get carried away by these surprisingly strong numbers - yet the progress was no flash in the pan. 

He said: "Rather, it is the result of the tussle between pent-up demand and chronically low supply and that tussle continues -even if the last two months have seen increases in both the number of mortgage approvals and the number of homes coming onto the market.

"The modest momentum could also be given a short-term boost by last week’s increase in interest rates, which, rather than cooling the market, may spur previously hesitant buyers into action during the typically busy ‘back to school’ season next month."

Mr Hopper added that for everyone else, softening prices and better affordability are creating some attractive buying opportunities - but the market remains deeply polarised, with pockets of value and activity pulling different regions in opposing directions.

Jonathan Samuels, chief executive of property lender Octane Capital, said weak supply rather than robust demand was acting as the primary driver. 

He said: "It would be premature to pop the champagne corks on the back of this seemingly robust data - the market might look punchy on the outside but it is pallid on the inside.

"Transaction levels overall are low and it's hard to see them picking up materially in the months ahead as Brexit uncertainty heightens and the impact of last week's interest rate rise remains to be seen."

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