After a subdued start to 2025, house prices recorded their largest monthly increase so far this year in July, rising by 0.4%, according to Halifax’s latest House Price Index.
Prices are up 2.4% over the past 12 months, although this is lower than the 2.7% seen in June. The average price of a home in the UK now stands at £298,237.
Amanda Bryden, head of mortgages at Halifax, said: “Challenges remain for those looking to move up or onto the property ladder. But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving.
“Combined with the more flexible affordability assessments now in place, the result is a housing market that continues to show resilience, with activity levels holding up well. We expect house prices to follow a steady path of modest gains through the rest of the year.”
Northern regions see strongest growth
Property price growth remains uneven across the UK, with Northern Ireland continuing to lead the charge as the strongest-performing region. House prices there rose by 9.3% over the past year, taking the average home value to £214,832.
The North West and Yorkshire & the Humber saw the strongest annual growth in England in July, with prices in these regions up 4%. This compares to an increase of just 0.2% in the South West. London remains the most expensive part of the UK to buy a home, with the average property there now costing £539,914.
Is your fixed rate ending?
A significant number of homeowners will come to the end of their fixed-rate mortgage deals in the second half of this year—particularly those on five-year agreements taken out during the pandemic housing boom, when interest rates were at historic lows.
Ms Bryden said: “While most borrowers coming to the end of five-year fixed-rate mortgage deals will see their monthly repayments rise, the extent of this will vary across households. Those coming off a two-year fixed-rate are very likely to see their monthly payments come down, as they originally locked in rates during the peak that followed the 2022 mini-budget.
“We’re unlikely to see a significant impact on house prices, but it may influence market dynamics if prospective home movers choose to delay plans as a result of tighter budgets.”
This month’s base rate cut is welcome news for those approaching the end of fixed rate deals, but with rates fluctuating all the time, it’s worth seeking professional advice on the best mortgage options to suit your needs.
