According to the most recent data from the largest mortgage lender in Britain, house prices are increasing at the quickest annual rate in over two years.
According to Halifax, the typical price of a house in the UK increased 4.3% in August to £292,505, the highest amount since August 2022—the month before Liz Truss's infamous mini-Budget.
The lender stated that prices have not increased more quickly year over year since November 2022, but it also issued a warning, pointing out that this was mostly due to market instability in the turbulent wake of the mini-Budget. In London, they had increased by just 1.5% from the previous year.
On a monthly basis prices rose just 0.3% in August, down from 0.9% in July.
Amanda Bryden, head of mortgages, Halifax, said: “Recent price rises build on a largely positive summer for the UK housing market. 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.”
Buying activity in the property market has been stimulated in recent month by falls in mortgage rates with many mainstream lenders now offering five year fixes priced at below 4%.
Jonathan Hopper, CEO of Garrington Property Finders, said: “Thestarting gun has been fired on the Autumn bounce - but this September buyers have extra ammunition thanks to more affordable mortgages.
“With interest rates falling across the board and some lenders now offering rates not seen since the Liz Truss era, thousands of buyers who had been sitting on the fence have sprung into action - with many setting themselves the goal of being‘in by Christmas’.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As mortgage rates have fallen, we have seen activity noticeably increase. Estate agents report that August was busy as motivated movers who may have delayed for a while have got on with their transactions, while we have seen people take advantage of more palatable rates.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “The market breathed a collective sigh of relief when first the election result ended lingering political uncertainty and again when interest rates started to fall.
“That added comfort is reflected in this solid, not spectacular, price growth figures from the country’s largest lender and reinforced by recent encouraging mortgage approval numbers.
“These show buyers and sellers did not panic but continued about their business over the summer. However, mortgages are still relatively expensive for many and talk of ‘a painful Budget’ by next Halloween is spooking many into holding off a little longer or at least negotiating harder to avoid what they regard as overpaying.”
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