UK house prices hit a two-year peak in August, lifted by increased confidence amongst homebuyers following a recent interest rate cut, according to the UK's largest mortgage lender. Halifax reported that property prices rose by 4.3% compared to the same month last year, bringing the average UK home price to £292,505.

Halifax, part of Lloyds Banking Group, attributed the price rise to a boost in buyer confidence after the Bank of England reduced interest rates at the start of August, marking the first cut in four years. Although house prices remain just below the June 2022 record of £293,507, this uplift signals a recovery in the market.

In average, UK house prices have shown an increase, with Nationwide reporting a 2.4% increase in the year to August 2024, while Halifax recorded a 4.5% rise.

However, Amanda Bryden, Halifax’s head of mortgages, noted: "While this is positive news for current homeowners, affordability continues to be a major issue for many prospective buyers still adjusting to higher mortgage costs." Despite the recent rate cut, interest rates remain at 5%, their highest level since 2008 during the global financial crisis.

The Bank of England is expected to lower interest rates again this year, though the exact timing remains uncertain. Its next meeting is scheduled for Thursday, 19 September.

Halifax also reported a 0.3% rise in house prices in August, compared to a 0.9% increase in July. Annual growth has reached a near two-year high over the past two months, though this is largely due to the weak property market a year ago rather than current strength.

First-time buyers, keeping a close eye on deposit requirements and mortgage rates, may welcome this period of slower price growth. In England, the north west experienced the sharpest rise, with prices up 4% to an average of £232,917.

 

 

 

 

Halifax's data only covers buyers with mortgages, excluding cash buyers or buy-to-let purchases, which make up around a third of all home sales. Nationwide, a rival lender, also reported a similar trend of rising property prices in August.