Annual house price growth has increased to its strongest level since December 2022, according to an index.
According to the Nationwide Building Society, house prices in the UK rose by 0.3 percent in July compared to the previous month.
This led to a slight acceleration in the annual growth rate of house prices from 1.5% in June to 2.1% in July – the fastest pace since December 2022.
Across the UK, the average house price in July was £266,334.
Robert Gardner, chief economist at Nationwide, said: “Prices are still around 2.8% below the all-time highs seen in summer 2022.
“Activity in the real estate market has been relatively stable in recent months, with the number of mortgages approved for home purchases hovering around 60,000 per month.
“While this is still (about) 10% below pre-pandemic levels, it is still a respectable pace given the higher interest rate environment.
“For borrowers with a 25% down payment, for example, the interest rate on a five-year fixed-rate contract has been around 4.6% in recent months, more than double the 1.9% average recorded in 2019.
“As a result, affordability is still limited for many potential buyers. In fact, the monthly mortgage payment for an average earner buying a typical first home is about 37% of take-home pay, significantly higher than the pre-Covid 28% and the long-term average of (about) 30%.”
