The UK property market has defied expectations with house prices rising at their fastest annual pace since July 2024, according to the latest Halifax House Price Index.
The lender's data shows prices increased by 1.4% month-on-month in July, marking the fourth consecutive monthly rise. On an annual basis, prices grew by 2.5% - the strongest year-on-year growth recorded in over twelve months.
What's Driving the Market?
Analysts point to several factors behind this unexpected resilience:
- Limited supply continues to support prices despite economic pressures
- Wage growth has helped offset some affordability challenges
- Mortgage rate stability following the Bank of England's decision to hold rates
Regional Variations
The report highlights significant regional differences:
Northern Ireland led the way with annual price growth of 4.1%, while Scotland saw a respectable 3.2% increase. In England, the North West was the strongest performer at 3.8%.
By contrast, London recorded the weakest growth at just 0.3%, though average prices remain significantly higher than other regions at £536,995.
Future Outlook
Halifax Mortgages Director Kim Kinnaird cautioned: "While July's figures show continued growth, we expect house prices to come under some pressure as affordability constraints persist."
Experts suggest the market may cool slightly in coming months as the full impact of higher interest rates continues to filter through to household budgets.
