House price growth accelerates

UK house prices grew at the fastest rate for nearly a year last month.

Data from the Halifax indicated that prices increased 1.4% compared to June, higher than expected, with 3.3% growth over the last three months compared to the same period last year.

Average house prices now stand at £230,280, a new record.

Despite increasing prices, the number of mortgage approvals also rose for the second consecutive month. Data from the Bank of England show approvals up 1.4% between May and June to just under 66,000 – the second highest level so far in 2018 – up 4.1% since April.

house prices increasing
(Data table: Halifax House Price Index)

Property market direction favourable for both buyers and sellers?

Despite rising prices for potential buyers to contend with, the current market trajectory is one that favours both prospective homeowners and current homeowners too.

Slowing housing supply and growing population demands have helped fuel the steady price rises, though mortgage approval rate data shows banks are still willing to lend, plus would-be buyers are still eager to buy.

Read more: How will rate rises affect mortgages and sales?

According to CEO of Emoov, Russek Quirk, any news on house price changes represent something of a ‘house price growth utopia’ whereby increases are criticised as bad for buyers, whilst negative growth bad for current owners.

“Many usual voices will be quick to highlight a lacklustre property landscape, but the highest increase in prices since November speaks for itself and is still palatable, if not absolutely ideal for both camps.

“Prices are up annually and while a slightly weary market hasn’t narrowed the unaffordability gap over the last year or two, it has at least stalled it from widening somewhat.”

With Brexit looming large on the horizon, a steadily growing housing market is certainly preferable before the potential unknowns once the UK officially leaves the European Union and enters the transition period. And whilst growing prices hinder purchase-power of first-time buyers, in particular, tools such as Help to Buy and changes to Stamp Duty are helping mobilise those entering the market for the first time.