Data released by mortgage lender Halifax on Wednesday showed that UK house prices rose by the most in six months in July, indicating new momentum in the housing market. House prices rose 2.3% year-on-year, the biggest annual increase since January. The last time house prices rose more year-on-year was in February 2023, when they rose 2.5%.
The Labour Party, which won a landslide victory in last month’s parliamentary election, promised to reform Britain’s planning system and set mandatory targets for faster housebuilding, but supply shortages are likely to remain a factor driving house prices in the medium term. In addition, last week, the Bank of England cut interest rates to 5% from a 16-year high of 5.25%, the first cut since March 2020. “Against the backdrop of falling mortgage rates and the possibility of further cuts in base rates, we expect house prices to continue to rise modestly over the rest of the year,” said Amanda Bryden, head of mortgages at Halifax.
Other indicators of the housing market also show momentum is picking up. Last week, rival mortgage lender Nationwide said its measure of house prices rose 2.1% in the 12 months to July, the biggest annual increase since December 2022.
