HOUSE prices are on the rise in regions across the UK and are set to increase over the course of the year, Britain’s biggest lender has revealed.
The housing market was quite stagnant in the first half of this year, but there are signs that growth is picking up.
However, it’s a mixed picture in the UK, with most regions seeing only relatively modest increases in house prices.
In England, the steepest rate of house price inflation can be found in the North West, where it has increased by 3.8% over the past year and now stands at £231,351, Halifax said.
Northern Ireland saw the strongest house price growth of any nation or region in the UK, Halifax said.
Prices rose 4% year-on-year in June from 3.3% in the previous month.
House prices in Scotland have also risen, with a typical property now costing £204,663, up 1.6% on the year before.
In Wales, house prices rose by 2.7% year-on-year to reach £220,197.
However, not all areas saw price growth.
The East of England was the only region or nation in the UK to see house prices fall over the past year.
House prices now average £328,747, down 0.9% year-on-year in June.
Meanwhile, London continues to have the most expensive property prices in the UK, now averaging £536,306 – up 0.9% on last year.
What happened to house prices?
House prices have slowed significantly over the past few years, with the average house price now sitting at £288,455, down from £288,931 in May.
It means that the average UK house price has remained relatively flat.
That was largely attributed to high mortgage interest rates making it more expensive for buyers, experts say.
Across the UK as a whole, house prices fell by 0.2% month-on-month in June, or just under £500 cash.
Try our interactive map below to find out the average house price in your region and average annual increases.
What could happen to house prices in the future?
Property values ​​are likely to rise slightly this year and into 2025, the lender said.
Amanda Bryden, head of mortgage lending in Halifax, said: “Mortgage affordability continues to be the biggest issue facing both homebuyers and those coming out of fixed-term contracts.
“This problem is likely to be gradually eased by a combination of lower interest rates, rising incomes and more subdued house price growth.
“While in the short term the housing market is delicately balanced and sensitive to the pace of change in the prime rate, based on our current expectations house prices are likely to rise modestly for the rest of this year and into 2025.”
She added that this could ease gradually, especially if the Bank of England (BoE) pushes through an interest rate cut in August.
Interest rates have remained at a 16-year high of 5.25% for nearly a year, causing major affordability issues, especially for first-time buyers.
In some signs of relief for borrowers, lenders including Halifax, HSBC UK, Barclays, Santander, NatWest and Yorkshire Building Society cut their mortgage rates this week.
According to UK Finance, around 1.6 million mortgages are missing out on fixed rates this year.
How will the election affect mortgage rates?
A Labor landslide in the general election could boost housing market confidence, some experts say.
Alice Haine, personal finance analyst at Bestinvest, said: “A stable political environment can potentially boost confidence in the housing market, particularly one that has struggled over the past year with high borrowing costs and a lack of available and affordable stock.
“Buying your first home, upsizing and even downsizing are major personal finance decisions, so confidence in how your land is managed is vital.
“Interest rates have remained at a 16-year high of 5.25% for almost a year now, causing major affordability issues for first-time buyers and those looking to move to larger homes.
Meanwhile, Nicky Stevenson, managing director of property group Fine and Country, added: “While the property market has had to contend with increased interest rates and political uncertainty, it has remained firm and is expected to see further growth following the general election.
“Annual house price forecasts reflect a more positive outlook than at the start of the year, helped by headline inflation reaching its 2 percent target.”
The BoE uses the base rate as a lever to control spending, with higher rates supposed to dampen demand and spending, which in turn reduces inflation.
With inflation expected to fall this year, the BoE is expected to follow suit with a rate cut. This would be good news for homeowners looking to relocate, households remortgaging and first-time buyers who could see lower mortgage rates.
Who Tracks Home Prices?
There are several different home price trackers out there, all of which measure something slightly different.
The official measure comes from the Office for National Statistics (ONS), which examines the prices that homes actually sold for after they were registered.
The organisation’s latest figures showed the average UK house price rose by 1.1% in the year to April.
This is the most accurate of all the indexes, but the numbers come out three months after homes are sold, so there’s a big time lag.
Some lenders and real estate websites also publish monthly indexes that track the average prices of the homes they provide mortgages on.
Nationwide said the average house price rose 0.2% in June.
Moderate monthly growth leaves the average UK house price at £266,064, the Nationwide Building Society index showed, up 1.5% on the same period last year.
According to the latest Rightmove index, the average price of properties coming to the market for sale in June fell by £21 to £375,110.
Meanwhile, Zoopla’s June numbers showed home sales rose for the fifth straight month in May.
While they adjust their numbers to balance out large outliers, both lenders measure average home prices based on the properties they see.
How to save for your first home
Have you ever wondered how first-time buyers get from savers to homeowners?
Getting on the property ladder can seem like a daunting task, but The Sun’s My First Home feature lets you find out exactly what it takes to finally get the keys to your own place.
Leanne Gem managed to buy her four-bed house for £456,000 on an ‘undervalued scheme’.
Karis Jacobs and her husband George used the 50/50 method to buy their first home just two years after losing their jobs.
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