Average UK house prices increased by 2.8%, to £270,000, in the 12 months to July, down from 3.6% in the 12 months to June, according to the latest UK House Price Index from the Land Registry.
Average house prices increased by 2.7% in England, 2.0% in Wales and 3.3% in Scotland.
The North East was the English region with the highest house price inflation, at 7.9%, up from 7.7% in the 12 months to June.
Annual house price inflation was lowest in London, at 0.7%, down from 0.9% in June.
Jean Jameson, chief sales officer at Foxtons, commented: “As expected, August brought a typical summer slowdown in new buyer activity, however this is beginning to pick up now that buyers and sellers are back from summer holidays and schools have restarted. Buyer demand has also been boosted by improved mortgage lending with higher loan to income multiple products on offer, as well as the fact mortgage rates are lower compared to this time last year. Nevertheless, there understandably remains some uncertainty ahead of the Autumn Budget. Overall, house prices have grown over the last 12 months, and where properties are priced pragmatically, they are still attracting interest and selling quickly.”
Lee Williams, national sales manager at Saffron for Intermediaries, said: “Today’s figures show a continued momentum in the market, with steady price growth supported by the Bank of England’s base rate cut last month. This has helped boost buyer confidence and expand mortgage options. While reports suggest Rachel Reeves may replace stamp duty and council tax with an annual property tax, this has not yet significantly impacted the market.
“This month saw new leadership as a new Housing Minister was appointed, issuing a ‘call to arms’ to ‘build, baby, build’. The industry will be looking for tangible measures to help meet the government’s 1.5 million home target. With the Budget set for late November, lenders are gradually increasing mortgage rates, prompting some buyers to act quickly and making advice from a qualified adviser increasingly important.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Offering the most comprehensive price snapshot of all the housing surveys by including cash and mortgaged transactions, the ONS figures show relative resilience. On the other hand, these figures do not tell the whole story as are a little dated so don't reflect the impact of the property tax rumours which recently caused an activity wobble.
“Over the past few weeks, buyers and sellers have become more cautious, not helped by continuing high inflation and mortgage rates not falling as quickly as anticipated until some clear direction is received from Government as to Budget policy.
“We may not know until the end of November so until then nervousness is likely to prevail with buyers, particularly those not dependent on the sale of another property or requiring little or no finance, holding sway."
