The UK housing market recorded its fastest monthly rise of the year in July, with prices increasing by 0.4%, according to the latest data from Halifax. The figure surpassed economists’ expectations of 0.3% and underlined the sector’s resilience despite ongoing cost-of-living pressures and recent tax changes.
Average house prices now stand at £298,237, 2.4% higher than in July 2024. Although annual growth slowed slightly from June’s 2.7%, the figures mirror data from Nationwide, which reported a 0.6% monthly increase for July.
The market has shown signs of stabilising following a surge in transactions earlier this year. Buyers rushed to complete purchases before changes to stamp duty thresholds came into effect in April. Announced in Labour’s October 2024 budget, the reforms lowered the tax-free threshold from £250,000 to £125,000 for most buyers and from £425,000 to £300,000 for first-time purchasers.
Halifax’s head of mortgages, Amanda Bryden, predicted that prices would continue to see modest gains in the coming months. She noted that while affordability remains a hurdle, the combination of easing mortgage rates, rising wages, and more flexible lending criteria is helping sustain activity. “The housing market continues to show resilience, with activity levels holding up well,” she said.
Official statistics back up this assessment. HM Revenue and Customs reported a 13.4% month-on-month rise in seasonally adjusted residential transactions in June, reaching 93,530 sales. Meanwhile, Bank of England data showed mortgage approvals for house purchases increased by 1.4% to 64,167 in the same period.
Looking ahead, Bryden pointed out that many homeowners will soon reach the end of fixed-rate mortgage deals agreed during the pandemic housing boom. Those on two-year fixes taken after the 2022 mini-budget could see monthly payments fall, while some on five-year fixes may face higher costs, though the impact will vary.
The Bank of England’s decision this week to lower its base rate to 4% from 4.25% — the fifth cut in a year — is expected to boost affordability further. However, additional reductions remain uncertain given persistent inflation and signs of a cooling jobs market.
Regional price trends remain varied. Northern Ireland saw the sharpest annual rise, with values up 9.3% to £213,832. Scotland recorded a 4.7% increase to £125,238, while prices in Wales climbed 2.7% to £227,928. In England, the North West and Yorkshire & Humber both posted 4% growth, while gains in southern regions were under 1%. London remains the most expensive market, with the average home costing £539,914.
While the market’s outlook will depend on economic conditions, strong demand, softer borrowing costs and stable sales volumes are keeping momentum steady midway through 2025.
For comprehensive UK news coverage visit Heraldberg
