UK house prices rose in July, reversing a sharp decline in June after temporary stamp duty cuts expired in England and Northern Ireland.
According to the latest figures from Nationwide, the average property price climbed by 0.6% to £272,664. This bounce follows the steepest monthly drop in more than two years and signals renewed activity in the housing market.
Annual price growth also increased, from 2.1% in June to 2.4% in July. Mortgage approvals remained steady, with 64,200 approved in the month.
Nationwide noted that homes are now more affordable than in the last decade, though priced at nearly six times the average UK salary. Borrowing, however, remains expensive. The interest rate for a typical five-year fixed mortgage, with a 25% deposit, is now more than triple what it was in autumn 2021.
Attention now turns to 7 August, when the Bank of England’s Monetary Policy Committee meets to set the UK base rate at 4.25%. Markets are predicting a cut to 4%, followed by another reduction to 3.75% later this year.
There are hopes this could ease borrowing costs, but last month’s unexpected rise in inflation – from 3.4% in May to 3.6% in June – may complicate matters. The Bank’s target is 2%, and the uptick could delay further cuts.
Still, Bank Governor Andrew Bailey has maintained that interest rates are trending “downward,” raising cautious optimism among buyers and homeowners alike.
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