Halifax: July shows +3.8% annual house price change

House prices in July 2020 were 1.6% higher than in June, and 3.8% higher than July 2019.

Halifax: July shows +3.8% annual house price change

House prices in July 2020 were 1.6% higher than in June, and 3.8% higher than July 2019, according to the Halifax House Price Index.

The May to July quarter showed a -0.2% change compared to February to April.

The average house price in July was £241,604, compared with £232,706 in the same month in 2019, and £237,834 in June 2020.

The highest point prior to this in the last year was February, which saw average house prices of £240,461.

Russell Galley, managing director at Halifax, said: “Following four months of decline, average house prices in July experienced their greatest month on month increase this year, up 1.6% from June and comfortably offsetting losses in 2020.

"The average house price in July is the highest it has ever been since the Halifax House Price Index began, 3.8% higher than a year ago.

“The latest data adds to the emerging view that the market is experiencing a surprising spike post lockdown.

"As pent-up demand from the period of lockdown is released into a largely open housing market, a low supply of available homes is helping to exert upwards pressure on house prices.

"Supported by the government’s initiative of a significant cut in stamp duty, and evidence from households and agents suggesting that confidence is currently growing, the immediate future for the housing market looks brighter than many might have expected three months ago.

“However, looking further ahead, there is still a great deal of uncertainty around the lasting impact of the pandemic.

"As government support measures come to an end, the resulting impact on the macroeconomic environment, and in turn the housing market, will start to become more apparent.

“In particular, a weakening in labour market conditions would lead us to expect greater downward pressure on prices in the medium-term.”

Ross Counsell, chartered surveyor and director at Good Move, said:“Annual house prices across the UK have grown by 1.6% in July, and the average UK house price of £241,604 is 3.8% higher than it was a year ago, which signals great growth in the housing market.

“Today’s statistics should therefore help reassure buyers and sellers in the UK that the housing market is starting to return to normalcy post-lockdown.

“Although we expect to see a continued boost in house prices across the UK in the short term, there is still a great deal of uncertainty surrounding the long-term effect of coronavirus, especially when government measurements such as the stamp duty holiday end.

"Therefore, the government must employ solid measures to help the market recover in the long-term.”

Alan Cleary, group managing director at OneSavings Bank, said: “The stamp duty holiday has clearly provided a further boost to affordability and has naturally stimulated demand.

"With supply having returned to more normal levels, overall levels of transactions can be expected to increase materially in the coming months.

"Buyers who put their plans on hold during lockdown have now been given the confidence to return to the market.”