The latest data released by the Office for National Statistics (ONS) has revealed that the increase in house prices in the year to July grew 2.2%. It is the fifth consecutive month of recorded annual increases. The previous month’s data revealed a 2.7% annual increase, but last year as interest rates remained high and inflation was taking a toll on the economy, the housing market had less buyer demand. Prior to the five consecutive months of house price increase, the ONS had reported eight consecutive months of annual house price declines. The average house price is now £290,000.

It may have been expected, but it doesn’t mean it wasn’t still a disappointment as the Bank of England’s Monetary Policy Committee (MPC) voted on Thursday to hold the standard base interest rate steady at 5.0%. This vote followed the meeting held in August that resulted in the first cut to the base rate since March 2020. Another cut is hoped for this year, and many had thought it would be in September. Now, the wait for the next possibility will be for the meeting in November or December as there is not a MPC meeting scheduled for October. 

In 2024, more than one and half million homeowners were to come to the end of their mortgage terms according to UK Finance. Some of those at the expiration of their mortgage term have failed to remortgage to secure a new deal and were moved to their lender’s standard variable rate or SVR. The reasons could be varied, but it might be guessed that some may not have understood the benefits of a remortgage, while others could have chosen to wait for cheaper interest rates. The choice to wait was likely helped along by the forecasts of cuts to the standard base rate by the Bank of England’s Monetary Policy Committee (MPC). 

Next week is the gathering of the Bank of England’s Monetary Policy Committee (MPC). The meeting will be on Thursday, 19 September and will follow the previous day’s release of the most recent inflation data. The expectation is for another rate cut to occur in 2024, and if it happens this month it would mean two consecutive meetings with a reduction. There will not be a meeting held in October, so after the September meeting, the next opportunity for a majority vote by the MPC to cut the base rate will be in November or December. The possibility of a second-rate cut has pushed some hopeful home buyers and homeowners in need of a remortgage to wait for the possibility of lower interest rates.

According to recent reports, the UK housing market has realized stronger demand from buyers in the last two months. In August, the average house price data revealed the largest increase in two years. According to those on the inside of the housing market, new attention from buyers in the market has increased as mortgage interest rates have dropped.

The UK housing market is seeing a boost in demand from home buyers. One reason is due to the lower mortgage rates being offered by lenders. Another is there is a greater supply of listed properties currently on the market. According to Halifax, the average UK house price reached a two-year high in August. The 0.3% increase last month followed a 0.9% increase in July. The August average house price reported from Halifax is £292,505. The annual increase is 4.3%, which is a reflection of the lower demand in the market last year due to higher mortgage interest rates.