After the Bank of England’s recent interest rate decrease, the average price of a home rose to £291,268 in July. Activity is expected to increase even more in the upcoming months.
After a stagnant three months, a major mortgage lender in the United Kingdom reported a 0.8% increase in house prices for the month of July.
In July, the average property price rose by over $2,200 to reach $291,268, according to Halifax. This represents an increase compared to the previous month, June.
There was a significant increase from one month to the next, which exceeded expectations. According to a survey conducted , economists had predicted a rise of around 0.3%.
As per the lender’s statement on Wednesday, there was a 2.3% increase in annual fees.
Due to the recent interest rate reduction by the Bank of England on August 2nd, there is a general expectation that the market will start to pick up after a period of more than four years.
There was a decrease of 0.25% in the total, which occurred after the time period that Halifax’s numbers covered.
Despite this, Amanda Bryden, the head of mortgages for the banking brand, expressed optimism about the recent rate cut. She believes that this reduction, along with previous decreases in mortgage rates, will be beneficial for individuals interested in remortgaging, buying their first home, or advancing on the housing ladder.
However, she voiced her worry about the challenges that prospective homeowners face due to affordability constraints and the limited availability of properties.
According to Ms. Bryden, with the current lower mortgage rates and the possibility of more base rate reductions, it is expected that house prices will continue to gradually rise for the rest of the year.
According to Halifax, there has been notable growth in the North West region, with prices rising by 4.1% from one month to the next since the start of the year. The average cost of a house in that area is £232,489.
According to the lender, property prices in London remain the highest, with the average home in the capital city currently estimated to be £536,052.
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An economist named Ashley Webb, who works for the research firm Capital Economics, stated that the increase throughout the country was “further evidence that house prices are bouncing back from the slight rise in mortgage rates in the first half of this year.”
In addition, he stated, “Although we believe that the Bank of England will wait until November before reducing interest rates once more, the risks are now skewed to the next rate cut occurring a bit sooner than we anticipate.”
“That may mean house price growth accelerates quicker than we expect over the rest of this year.”
According to Sam Mitchell, the chief executive officer of Purplebricks, an online estate agency, “the growing confidence that we have seen take hold of the housing market in recent weeks has been supercharged by the Bank of England’s interest rate cut.”
“With lenders beginning to slash mortgage rates in response to last week’s decision, buyers are starting to move ahead with purchasing decisions they have been holding off for weeks.”