UK house prices picked up In July, rising at its quickest since November, the Halifax has said. Halifax says prices during May, June and July rose by 3.3% compared to last year, with the average cost of a house hitting a record £230,280.
Prices in July rose a higher-than-expected 1.4% from the month before. Despite this, Halifax said housing activity remained “soft”. It also said it did not expect last week’s interest rate rise to have much impact.
This latest survey reflected that of rival Nationwide, which also reported a rise in the annual rate of price growth in July. Nationwide said annual house price growth increased to 2.5% in July, with the price of the average home rising to £217,010.
Last week, the Bank of England key interest rate rose to 0.75% from 0.5%, which is likely to affect the 3.5 million people with variable or tracker mortgages.
However, the Halifax said it did not anticipate that the rise would have a “significant effect on either mortgage affordability or transaction volumes”.
The lender added it did not expect much interesting activity for the rest of 2018.
“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,” said Russell Galley, managing director at the Halifax.
“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.”
Howard Archer, chief economic adviser to the EY Item Club, said that, despite the spike in prices reported by the Halifax, “we doubt that the housing market is starting to see a marked upturn”.
“The impression remains that the housing market is struggling to really step up a gear in the face of still limited consumer purchasing power, fragile confidence and expectations of the Bank of England edging up interest rates,”
“We expect house price gains over 2018 will be limited to around 2.5%. At this stage, we expect prices to rise no more than 3% in 2019.”