Price of average semi soars £3k in month to hit new record high

HOUSE prices rose last month to reach a new record high, according to the Halifax.

An extra £3,253 was added to the value of a typical home as house prices increased at their steepest rate for eight months.

The average cost of a three-bedroom semi-detached home rose 3.3 per cent to a new record £230,280 in the year to July, as low unemployment and rising wages boosted the market.

House price inflation is now at its highest level since last November, the latest data from the Halifax showed.

The pace of the rise has confounded many economists, who had expected it to be 2.7 per cent, according to a Reuters survey.

The increase pushed house price inflation back above wage growth, which is currently at 2.5 per cent a year. The rise comes just days after the Bank of England raised interest rates from 0.5 to 0.75 per cent. Halifax said house prices are being supported by underlying strength in the jobs market, with employment rising by 137,000 in the three months before May. Pressure on household finances is easing as wage growth has begun to outstrip inflation. Jonathan Hopper of Garrington Property Finders said: “With the rate of annual price growth rising to its highest level so far this year, the progress is no flash in the pan. Rather it’s the result of the tussle between pent-up demand and chronically low supply.

“That tussle continues, even if the last two months have seen increases in both the number of mortgage approvals and the number of homes coming onto the market.

“The modest momentum could also be given a short-term boost by last week’s increase in interest rates, which, rather than cooling the market, may spur previously hesitant buyers into action during the typically busy ‘back to school’ season next month. Yet the future course of the market is delicately balanced.

“With even Cabinet ministers warning a no-deal Brexit is likely, investment buyers are dialling up their caution. For everyone else, softening prices and better affordability are creating attractive buying opportunities. But the market remains deeply polarised, with pockets of value and activity pulling different regions in opposing directions.” UK home sales fell by three per cent in June, with the figure for the three months to June unchanged compared to the previous quarter. Halifax managing director Russell Galley said: “The recent improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest approvals will remain broadly flat until the end of the year.” August’s figures will be the first to reflect the impact of the base rate rise.

3.3% rise in the price of semi in the year to July

2.5% current average annual wage growth