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Housing

UK House Prices Return to Growth in July, Defying Expectations

Strategic Insights

— 2 min read

House prices in the UK returned to growth in July, with a 0.6% increase from the previous month, according to the lender Nationwide. This is slightly ahead of the 0.5% increase analysts had expected. The annual rate of house price growth also accelerated to 2.4%, up from 2.1% in June. The average price of a house now stands at £272,664, still short of the £273,427 recorded in May.

Key Takeaways:

  • House prices in the UK returned to growth in July, with a 0.6% increase from the previous month, according to Nationwide.
  • The annual rate of house price growth accelerated to 2.4%, up from 2.1% in June.
  • The average price of a house now stands at £272,664, still short of the £273,427 recorded in May.
  • Robert Gardner, Nationwide's chief economist, expects activity to continue strengthening gradually, provided the economy remains on track, aided by strong wage growth, subdued price growth, and greater availability of high loan-to-value mortgages.
  • Bank of England data released this week also pointed to a housing market recovery, with the number of mortgage approvals and the value of new mortgage lending rising in June.
  • The interest rate paid on new mortgages fell for a fourth consecutive month in June, to 4.34%, according to Bank of England data.
  • Elliott Jordan-Doak, at Pantheon Macroeconomics, says Nationwide's figures are "another indication that the market is gradually recovering", in line with recent surveys of estate agents reporting a rise in buyers.
  • Ashley Webb, at consultancy Capital Economics, notes that a weak jobs market may prevent the recovery from continuing at this pace, but house prices will gain "renewed impetus" next year if interest rates remain low.

Statistics:

  • 0.6%: July's increase in house prices compared to the previous month, according to Nationwide.
  • 2.4%: The annual rate of house price growth in July, up from 2.1% in June.
  • £272,664: The current average price of a house in the UK, still short of the £273,427 recorded in May.
  • 0.5%: The increase in house prices that analysts had expected in July, according to Nationwide.
  • 2.1%: The annual rate of house price growth in June.
  • £273,427: The average price of a house in May.
  • 4.34%: The interest rate paid on new mortgages in June, down from previous months, according to Bank of England data.

Sources:

  • Nationwide: "House prices return to growth in July, according to Nationwide's monthly index"
  • Bank of England: "Mortgage approvals and new mortgage lending rose in June, according to Bank of England data"
  • Pantheon Macroeconomics: "Nationwide's figures indicate a gradual recovery in the housing market"
  • Capital Economics: "House prices will gain renewed impetus next year if interest rates remain low"

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