In a surprise announcement, house prices picked up in July with the annual rate of growth rising from 1.8 per cent in the previous month to 3.3 per cent, according to the Halifax.
On a monthly basis, prices rose by 1.4 per cent last month, making the typical home in the UK cost a new record high - £230,280.
“While the quarterly and annual rates of house price growth have improved, housing activity remains soft. Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year” cautions Russell Galley, managing director at Halifax.
“In contrast, the labour market remains robust, with the numbers of people in employment rising by 137,000 in the three months to May with much of the job creation driven by a rise in full-time employment. Pressures on household finances are also easing as growth in average earnings continues to rise at a faster rate than consumer prices” Galley adds.
He says last week’s rise in the Bank of England base rate is unlikely to have “a significant effect on either mortgage affordability or transaction volumes.”
Galley’s figures follow those from the Nationwide, released last week, which showed a more modest 0.6 per cent monthly rise and 2.5 per cent annual increase.
The better than expected figures were explained by Jeremy Leaf, north London estate agent and former RICS residential chairman, as being down chiefly to “a shortage of stock and continuing low mortgage rates.”
“Viewings are up but it is hard to obtain commitment as political and economic uncertainty remain. We’re looking forward to a reasonably active summer and autumn period as fewer but more serious buyers come to terms with changed market conditions” he says.
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.
“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” he says.