The average price of a UK home climbed again in August, although the rate of annual growth slowed, as the country’s largest lender warned of a “more challenging period” ahead for house prices.
The average price of a home was £294,260 in August, 0.4% higher than the previous month, and marked another record high, according to Halifax.
It called the monthly rise “relatively modest” compared with the rapid house price inflation that has been seen in recent times, where the average monthly increase in house prices has been 0.9%.
The August increase marked a return to growth for house prices, after they fell in July for the first time in more than a year. Halifax warned at the time that higher interest rates and the broader cost of living crisis would have an impact.
The annual rate of house price growth dropped slightly last month, to 11.5% from 11.8% in July – the lowest level in three months. The price of an average home has increased by more than £30,000 over the past 12 months.
The Bank of England announced its biggest increase in interest rates in 27 years in early August, taking the UK base rate to 1.75% – a 13-year high – in an attempt to rein in soaring inflation as gas prices drive up UK energy bills. The central bank’s monetary policy committee will next reassess interest rates in mid-September, and it is expected to continue raising rates into next year.
“House prices have so far proved to be resilient in the face of growing economic uncertainty,” said Kim Kinnaird, a director of Halifax mortgages.
However, she added: “Industry surveys point towards cooling expectations across the majority of UK regions, as buyer demand eases, and other forward-looking indicators also imply a likely slowdown in market activity.”
The rises
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