UK property prices grew by 3.3 per cent year-on-year in the three months to July, according to new data published by Halifax. This represented a significant jump from the three months to June, when the year-on-year increase was only 1.8 per cent.
A key reason for this increase was a 1.4 per cent month-on-month jump in prices in July.
The bank’s latest House Price Index showed that the typical UK home now costs a record £230,280.
As well as the year-on-year increase picking up, the quarter-on-quarter price rise also grew by 1.3 per cent on the February to April period.
Halifax managing director Russell Galley said: “While the quarterly and annual rates of house price growth have improved, housing activity remains soft.
“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.”
He added that one factor that should help underpin sales and prices is the jobs market, with employment numbers at a record high and the number out of work at its lowest rate since 1975. This means job security is particularly high at present, notwithstanding fears of what might elapse after Brexit.
Another factor Mr Galley considered is that of the recent Bank of England base rate rise. It might be suggested that this would impact on the market by deterring those who will have to pay more for their mortgages. However, he said: “We do not anticipate that this will have a significant effect on either mortgage affordability or transaction volumes.”
If the base rate rise has little impact, this may be due to the slow speed of change. While the Bank of England’s Monetary Policy Committee revealed in the minutes of the meeting that it was likely more increases to the base rate will be implemented in due course, it stated these will happen “at a gradual pace and to a limited extent”.
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