Rising buyer confidence drives up annual house prices by 4.3%
August, which is usually a quiet month for estate agents, did not slow down this year as easing interest rates drove many people to move home, says Halifax.
The Halifax says house prices are rising by 4.3% a year, the strongest rate for nearly two years making the average house price £292,505.
It says this is, in part, due to rising confidence among home buyers thanks to easing interest rates, which in turn is increasing competition for homes and therefore higher final prices.
The quarterly rise rate is more sedate, though, at 0.8% as is the monthly rate – house prices rose 0.3% last month.
“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 of £293,50,” says Amanda Bryden (main image), its Head of Mortgages.
“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.”
Industry reaction
Nicky Stevenson, Fine & Country
“House prices gained momentum in August, setting the stage for a potential Autumn boost,” she says.
“Property transactions in September are typically 12% higher than in August, a trend that looks likely to continue this year.”
Anthony Codling, RBC Capital Markets
“We expect this positive momentum to continue for the remainder of 2024 and to see a robust autumn selling season as mortgage rates to continue to fall,” he says.
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts.
“One small reduction in interest rates has translated into an instant response from the housing market during what is usually one of the quietest months of the year,” she says.
“In our offices, we have agreed a large number of sales in all price ranges as sellers were encouraged to reduce their pricing or seize the day and launch there and then, rather than wait for September.
“The markets are pricing in another rate cut in November, taking base rate to 4.75 per cent, but that is very late in the day to wait to launch a property as most people want to move by Christmas. September or October would be a better option, ensuring the price is as accurate as possible to enable a successful and timely sale.”
Karen Noye, Quilter
“The latest Halifax house price index suggests the typical mid-summer lull in housing market activity has had little impact on house prices this year,” she says.
“A dip in activity is usually to be expected in the summer months, but this year it appears to be minimal, and we are instead seeing signs of an ongoing recovery in the housing market.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman
“The market breathed a collective sigh of relief when first the election result ended lingering political uncertainty and again when interest rates started to fall,” he says.
“That added comfort is reflected in this solid, not spectacular, price growth figures from the country’s largest lender and reinforced by recent encouraging mortgage approval numbers.
