UK house prices up 0.1% in July, growth falls to 1.8%

UK house prices saw a marginal increase in July, ending a period of stagnation, but annual growth slowed as high mortgage rates and economic uncertainty continued to weigh on the market. According to data released on Friday, July 31, by Nationwide Building Society, the average house price rose by 0.1% month-on-month to £277,542. The annual rate of growth, however, decelerated to 1.8%, down from 2.2% in June.

The figures point to a subdued market adjusting to higher borrowing costs and geopolitical tensions. Nationwide's chief economist, Robert Gardner, said market activity and prices have remained soft, reflecting an uncertain economic backdrop. He cited the ongoing conflict between Iran and the United States, which is exerting upward pressure on energy prices and market interest rates. The Bank of England held its base rate at 3.75% on Thursday, July 30, but signaled it was prepared to raise rates later in the year if the Middle East conflict prolongs inflationary pressures.

Mortgage rates have climbed significantly, with the average rate now around 4.75%, up from 4% at the start of the year. This adds more than £1,500 annually to the cost of buying an average-priced home....