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July sees rise in annual house price growth to 3.3%

09 August 2018

United Kingdom home sales fell by three per cent in June, with the figure for the three months to June unchanged compared to the previous quarter.

The figure compares with the 1.8% recorded in June and represents the largest increase since last November.

That's a much higher jump in house prices than expected and a higher revision on the monthly figure for June as well.

United Kingdom house prices increased at a faster pace in July to hit a record high level, data from the Lloyds bank subsidiary Halifax and IHS Markit showed Tuesday.

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Halifax also pointed to a "robust" labour market, notably the recent increases in people in full-time employment.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, also said July's rebound in prices was mainly due to a shortage of homes on the market and continuing low mortgage rates.

Foundation Home Loans marketing director Jeff Knight says: "With the Bank of England's decision to raise interest rates for only the second time in a decade, households feeling the pinch may be concerned that this could be the beginning of a new era".

A bounce in volatile monthly figures added £3,253, or 1.4 per cent, to the cost of the average home and saw annual house price inflation accelerate from the 1.8 per cent seen in June.

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"With regard to the recent rise in the Bank of England Base Rate, we do not anticipate that this will have a significant effect on either mortgage affordability or transaction volumes".

Russell Quirk, founder and CEO of Emoov.co.uk, commented: "While these house price reports cover the whole of the United Kingdom and provide us with an average which, of course, can hide regional idiosyncrasies, the current trajectory of the United Kingdom property market is one that favours homeowners both existing and aspiring".

Russell Quirk, founder and chief executive of Emoov, says the current price path for the market as a whole favours both existing owners and aspiring buyers.

He said: "We remain dubious that the housing market is seeing a sustainable shifting up of a gear". Howard Archer, chief economic advisor to the EY Item Club, said: "We remain doubtful the United Kingdom housing market is stepping up a gear".

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"Following the recent moderate rate hike to 0.75 by the BOE, mortgage rates still remain low and this small increase is unlikely to put anyone off buying a property as rental prices continue to increase".

July sees rise in annual house price growth to 3.3%