UK house prices climb for 3rd straight month

UK house prices rose for the third consecutive month in July, showing signs of market stabilisation despite the highest borrowing costs in 16 years.

According to the Nationwide Building Society, house prices increased by 0.3 per cent in July, following a 0.2 per cent rise in June. This growth was above economists’ expectations of 0.1 per cent.

The average cost of a home is now £226,334 ($290,560), just 2.8 per cent below the peak reached in summer 2022. Prices are 2.1 per cent higher than a year ago, marking the largest annual increase since December 2022.

Nationwide’s Chief Economist, Robert Gardner, noted that while housing activity remains steady, with around 60,000 mortgages approved monthly, it is still 10 per cent below pre-pandemic levels.

However, affordability challenges persist, with first-time buyers now spending about 37 per cent of their pay on mortgages, up from 28 per cent before COVID-19.

The Labour government, led by Keir Starmer, aims to boost housing supply by delivering 1.5 million additional homes over the next five years. Market confidence is bolstered by expectations that the Bank of England may lower its key interest rate soon.

Recent data shows mortgage approvals are steady at around 60,000, near the highest level in 18 months. Analysts predict that modest rate cuts could further support the housing market by reducing borrowing costs.

Attribution: Bloomberg