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Halifax: House prices increased by 0.3% in August, after a 0.9% rise in July

ended 06. September 2024

House prices increased by 0.3% in August, after a 0.9% rise in July, while year-on-year prices were up +4.3%, the strongest rate since November 2022 , according to the Halifax. Amanda Bryden, Head of Mortgages, Halifax, said:

“House prices increased by +0.3% in August, following a rise of +0.9% in July, with the typical property now costing £292,505. Annual growth has risen to +4.3%, the strongest rate since November 2022, but this is due in large part to the comparison with weaker growth this time last year.

“Recent price rises build on a largely positive summer for the UK housing market. Prospective homebuyers are feeling more confident thanks to easing interest rates. That optimism is reflected in the latest mortgage approval figures, now at their highest level in almost two years.

“Such has been the resilience of house prices that the average property is now just £1,000 shy of the record high set in June 2022 (£293,507). While this is welcome news for existing homeowners, affordability remains a significant challenge for many potential buyers still adjusting to higher mortgage costs.

“However with market activity picking up and the possibility of further interest rate reductions to come, we expect house prices to continue their modest growth through the remainder of this year.”

Newspage asked poperty experts and economists for their views, below.

14 responses from the Newspage community

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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
It wasn't an average August. Continued rate cuts from lenders throughout the summer months really started to feed through into demand and enquiry levels were far higher than usual. Affordability remains an issue for some but it is starting to improve. The easing in rates is easing the property market back to health. You get the feeling a lot of people want to purchase a home and get locked into a rate now before any potential reverse in mortgage pricing due to the Autumn Budget.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
For August, demand was fierce, fuelled by falling mortgage rates as lenders fight for market share. This will continue to push up house prices, which remain resilient. Only the Autumn Budget could derail this train.
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Craig Fish
Director at Lodestone Mortgages
This is good for homeowners, but not so good for first-time buyers. This news comes as no surprise. There has been pent-up demand for property for several months already, and now we are seeing rates drop with increased lender competition that demand is turning into sales. House prices are now going to continue to increase, so it's good to see many lenders adapting and increasing their affordability and income multiple calculations to help more buyers.
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Ben Perks
Managing Director at Orchard Financial Advisers
It’s been a pretty positive summer for house prices and this looks set to continue. There has been an influx of properties added to Rightmove this week, demonstrating that the appetite to get moving has returned. Hopefully this is a sign of better times ahead.
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Tony Castle
Managing Director at PFG Mortgages
It was a glorious August for the property market. We had the Bank of England base rate cut and lenders continuing to cut rates throughout the month, which turned out to be busier than expected with mortgage enquiries and completions. There is a definite feel-good factor driving the property market in the right direction.
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Rohit Kohli
Director at The Mortgage Stop
Usually, the August holidays mean transactions slow down as people take a break. However this year we’ve had a very busy month of enquiries with borrowers and would-be buyers feeling more optimistic since the rate reductions. However there is a clear change in tone this last couple of weeks since the spectre of tax hikes was laid out by the new government with many people we speak to wanting to lock in deals before whatever storm comes post-Budget in October.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
August saw an unexpected surge in mortgage enquiries, despite the holiday season. Falling rates and renewed competition between lenders drove activity last month. This renewed confidence suggests the market is turning a corner. However, the property market's attention is increasingly turning to the Chancellor. Any punitive tax changes in the upcoming Budget could undermine all the progress we have had and alter the market's trajectory for the rest of the year.
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Mark Eaton
COO at April Mortgages
On the whole, it was a busy August and the base rate cut at the very start of the month likely contributed to this increased activity. However, uncertainty persists with potential inflation rises and the upcoming Autumn Budget. This kind of potential uncertainty underlines how borrowers remortgaging every 2-3 years can be quickly exposed and perhaps explains why many borrowers are turning to long-term fixed rates. These offer protection against economic uncertainty and provide peace of mind and flexibility in financial management, especially important as mortgages are often the largest monthly expense.
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Peter Stimson
Head of Product at MPowered Mortgages
Typically, purchase activity drops by around 10% in August but last month was about as un-August an August that you could get. The feel-good factor from the Bank of England reducing the base rate on the first day of the month, and ongoing rate cuts from lenders, almost certainly contributed to the increased activity levels. Interestingly, mortgage rates continued to drop in August while swaps remained more or less stable since the beginning of the month. Competition between lenders is the most intense I have seen in 30 years of working in the mortgage industry. From a margin perspective, the current lending environment is brutal and the rate cuts we’re seeing are almost certainly not sustainable with swaps where they are. Looking forward, all eyes are increasingly turning to the Autumn Budget and any announcements that could hit markets and mortgage pricing. Let’s hope it is a Budget the markets believe in.
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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
With mortgage lenders engaged in a rate-cutting battle, the property sector is walking a tightrope between optimism and caution, with every policy announcement causing ripples of excitement or concern. The combination of competitive mortgage products and the potential for further interest rate cuts has created an environment ripe for increased buyer interest. However, the upcoming Autumn Budget could be a Pandora's box for house prices, with policy changes capable of bolstering the market or exacerbating existing vulnerabilities. Furthermore, consumer confidence will play a vital role in dictating the direction of house prices, with the cost of living crisis still casting a long shadow over the property market. Currently, house prices are at an inflection point, and only time will tell whether the current momentum can overcome the significant economic and policy hurdles that lie ahead.
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Chris Barry
Director at Thomas Legal
In August we saw our largest month for completions since the final SDLT rush 2 years ago. Whilst new instructions were slightly down on July, they were considerably up on August last year and up on 2017, 2018 and 2019. We expect the autumn market to be strong and are already seeing the first few days of September translate into high daily transaction volumes. In terms of value, it currently takes 6.1 times the average salary to purchase the average property value. This is lower than 2007 meaning, in real terms, adjusting for inflation affordability right now should feel easier than it did on the lead up to the financial crash when mortgage rates were around 5.5%.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Now the angels are back to school, we should see increased activity in the UK housing market. Rates have improved with the outlook for further cuts before the end of the year. Reeve’s Halloween budget could determine if we finish the year on a positive note going into 2025.
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Justin Moy
Managing Director at EHF Mortgages
Activity in the month of August didn’t show the typical slowdown you would expect, with many borrowers trying to take advantage of lower mortgage rates and release the pent-up demand to move home. But with the fear of sweeping increases in CGT, landlords have been quick to offload property and increased supply has also fuelled those improvements. But if CGT rates are increased too far, landlords won’t sell and stock levels will sharply fall, causing higher prices and more competition, which is exactly what the market doesn’t need.
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Iain Swatton
Director at Exemplar Financial Services
August's base rate cut from the Bank of England and ongoing reductions from lenders are creating renewed confidence in bricks and mortar. While the market hasn't fully picked up speed yet, increased supply and better borrowing conditions offer a positive outlook for buyers moving into the autumn. As landlords sell ahead of potential capital gains tax changes in the Autumn Budget, buyers are likely to see more choice in the market, which could help balance out house prices.