The annual rate of house price growth increased modestly in July to 2.4%, from 2.1% in June, as house prices were up 0.6% month on month. With the release of the Nationwide house price index data, industry experts share their thoughts.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“July saw a modest pick-up in the rate of annual house price growth to 2.4%, from 2.1% in June. Prices increased by 0.6% month on month, after taking account of seasonal effects.
Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well. Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre-pandemic average, despite the changed interest rate environment.”
Karen Noye, mortgage expert at Quilter:
“The latest data from Nationwide shows that despite the usual summer lull, the housing market remains resilient as house prices rose 0.6% in July, bringing annual growth to 2.4%. Following a 0.9% decline in June, this is a strong bounce back as the market continues to adjust to the stamp duty reforms earlier in the year.
Activity remains strong, with yesterday’s monthly property transaction data highlighting a 13% month-on-month growth in sales, with the 93,530 transactions being 1% higher than the same point last year. While the backdrop remains uncertain, it is at least supportive for homebuyers.
All eyes will be on the Bank of England next week and what it decides to do with interest rates. It was thought that a rate cut was fairly certain on Thursday, but recent inflation data coming in higher than expected may just temper things slightly and force buyers to wait. Should the Bank of England follow through with a rate cut, however, that will help support the buyers.
We have also witnessed the launch of the mortgage guarantee scheme earlier this month. While it remains early days to assess the impact of this scheme, it should help first time buyers with affordability at a time when upfront costs such as stamp duty have risen. The government is on something of a deregulation agenda currently, so the housing market and schemes such as this will be watched closely to see what impact is being had.
While the economic picture in the UK isn’t the healthiest, it is at least stable, and this will ultimately keep house buying demand up. If the Bank of England can bring about another two interest rate cuts this year and bring the base rate below 4%, that will send a huge confidence boost through the housing market.”
Nathan Emerson, CEO at Propertymark, comments:
“This shows that the UK’s housing market remains stable at a time when numerous domestic and international factors are impacting the wider economy.
With continued talk of a gradual easing of interest rates, even while inflation remains above the Bank of England’s targeted rate of 2%, it is vital that this results in more affordable mortgage products for aspiring buyers and home movers. Many people are delaying paying off their mortgages until later in life via 35-year or 40-year mortgages. Therefore, a reduction in interest rates would be very welcome to help offset ongoing financial pressures and worries over the cost of living for many.”
Matt Thompson, head of sales at Chestertons, says:
“We have been seeing house hunters pausing their search amid the economic climate and level of interest rates but many feel that the property market now provides a window of opportunity as more properties are up for sale. Last month alone, some of our branches have seen an evident uplift in the number of vendors wanting to sell which has motivated more buyers to resume their search and make an offer. With the Bank of England likely to lower interest rates next week, we expect more buyers to proceed with their property search over the coming weeks.”
Tom Brown, Managing Director, Real Estate at Ingenious, said:
“Today’s data underscores the continued resilience and appeal of the UK property sector despite elevated inflation and stubborn borrowing costs. We have welcomed the BoE’s recent rate cut as a hopeful first step in a much-needed easing cycle.
There’s clearly a significant and notable shortage of housing inventory across various price brackets and locations. Consequently, any decline in homeowner sales is likely counterbalanced by increased demand from renters and investors. This is a trend that is not going away. However, it’s crucial to recognise that the situation isn’t consistent nationwide or across different property pricing brackets. It’s helpful to delve into subsectors and regional dynamics when assessing opportunities, as a broad market view can be misleading. In the real estate sector, we’re seeing significant investment capital for assets for long-term rental. On account of their scale and buying power, these typically institutional investors face fewer disruptions than owner occupiers or small-scale Buy-to-let investors.
At Ingenious, we continue to work closely with borrowers and investors, adapting to the dynamic market landscape and broader economic shifts, including those related to the climate crisis and changing lifestyles. We are expanding the reach of our development lending product to provide extended stabilisation terms for specialised developers in the rental sector. Furthermore, we’re introducing special lending terms for developers focused on reducing embedded carbon in their construction practices.”
Daniel Austin, CEO and co-founder at ASK Partners, said: “Today’s rise in property prices brings some optimism, but growth remains subdued as high borrowing costs continue to weigh on buyers. While the Bank of England’s decision to hold rates offers limited reassurance, persistently elevated fixed mortgage rates are still delaying meaningful relief.
The construction sector is already grappling with soaring build costs, planning bottlenecks, and a chronic shortage of skilled labour. Investors and developers remain motivated by the enduring supply-demand imbalance, particularly in resilient sectors such as co-living and build-to-rent.
For investors seeking stability amid global uncertainty, including market volatility triggered by resurgent US protectionism, UK real estate debt continues to stand out. It offers capital preservation, steady income, and insulation from equity market swings, making it an increasingly attractive alternative in this environment.”
