UK house prices edged higher in August, industry data showed on Wednesday, reversing July’s decline.
According to the latest Halifax House Price Index, house prices increased by 0.4% last month, compared to fall of 0.1% in July. A typical house now costs an average of £294,260, a fresh record.
The annual pace of growth eased from 11.8% to 11.5%, however, the lowest level in three months.
Kim Kinnaird, director at Halifax Mortgages, called August’s increase “relatively modest”, noting that monthly house price inflation has averaged at around 0.9% over the last year.
She continued: “While house prices have so far proved resilient in the face of growing economic uncertainty, 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.”
Interest rates have risen six times since December, to 1.75%, as the Bank of England looks to tackle surging inflation, currently at a 40-year high of 10.1%. Energy bills have also rocketed, with the price cap due to jump again, by 80%, next month.
Kinnaird added: “With house price to income affordability rations already historically high, a more challenging period for house prices should be expected.
“However, this should be viewed in the context of the exceptional growth witnessed in recent years, with average house prices having increased more than £30,000 over the last 12 months alone.”