The average UK home is now worth a “record high” of £230,280 according to Halifax’s latest house price index, but most indications show the market is actually changing very little.
New figures on house prices from Halifax for July have revealed that the average property value in the UK has increased by 3.3% compared to this time last year, with a 1.8% jump compared to June’s monthly figures.
[crb_image link=”https://www.buyassociation.co.uk/advice/property-investment-starter-course/” image=”https://cdn2.hubspot.net/hubfs/1717782/Asset_Store/WebCTA/cta.jpg” align=”left”]
According to the bank, which calculates its figures based on its mortgage lending information on sold properties, the average house price is now £230,280, which is the highest level recorded by Halifax – although the increase is much greater than Nationwide’s 2.5% annual property price rise, highlighting the discrepancies in house price indices.
Furthermore, Rightmove, which uses asking price figures on its website to work out its house price statistics, released its latest monthly index for July to reveal a 1.4% annual increase, putting average asking prices at £309,191 – around £80,000 below Halifax’s house value figures.
While it is normal for the various house price indices to produce different results, due to their varying methods in calculating values, such a significant gap could indicate that sellers are still accepting large discounts from their original asking price.
Not a turning point in property market
Commenting on the latest index, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Month-to-month changes in Halifax’s measure of house prices always should be taken with a large pinch of salt, given that its index is four times as volatile as the official measure. Most other indicators of house price growth remain weak.
“Accordingly, we doubt that the jump in Halifax’s measure of house prices in July marks a turning point for the market.”
Halifax also pointed out that transaction activity “remains soft”, indicating that despite the latest price hike, the housing market overall is relatively flat.
Jeremy Leaf, a north London estate agent, added: “House prices experienced a rebound in July but this was mainly due to shortage of stock and continuing low mortgage rates, as we have found on the high street that many buyers have already factored in the increase in interest rates.
“It is almost as if the north/south divide is working in reverse with more activity outside rather than inside the capital.”