Nationwide July house price index: ‘The property market is less in survival mode than revival mode’

UK house prices increased by 0.3% month on month in July, after taking account of seasonal effects, according to the Nationwide.

This resulted in a slight pickup in the annual rate of house price growth from 1.5% in June, to 2.1% in July – the fastest pace since December 2022.

Newspage asked property and mortgage experts for their views.

Rohit Kohli, director at The Mortgage Stop said, “Demand has been steadily growing through this year but supply remains constrained, which is pushing up prices.

“Buyers are starting to have conversations about going above asking prices and, if rates are cut today, we can expect demand to increase further and prices to continue to rise.

“However, we are warning buyers who do go above asking price that valuers have not yet caught up and we are still seeing them deliver significant down valuations, which is affecting mortgages.”

Dr Konrad Rotthege, Co-founder at pro-tech conveyancing platform, Conveyo said, “The property market was resilient in July, defying traditional seasonal trends with overall demand remaining robust.

“The ongoing reduction in mortgage rates has undoubtedly stimulated demand, but affordability remains a significant challenge, particularly for first-time buyers. The house price crash some predicted simply didn’t materialise and, for many, prices are still challenging.

“A potential base rate cut could inject further energy into the market, with buyers likely becoming more active. Of course, broader economic conditions will also play a role. Currently, the market appears balanced, with neither buyers nor sellers holding significant sway.

“A rate cut could tip the scales slightly in favour of sellers, increasing competition for properties. Despite the potential for lower mortgage rates, higher living costs and limited housing supply continue to constrain market activity.”

Chris Barry, Director at Thomas Legal said, “We saw new enquiries jump 80% in July compared to the same month last year. New enquiries have been at a record high for us since the begining of the spring and have not slowed, even through the General Election.

“The increased demand seems to be driven by the quiet year that was 2023, a time when the trajectory of interest rates was still uncertain.

“The Bank of England holding the base rate with a view to reducing today or in the autumn has made people more confident that taking on a new or larger mortgage now is likely to see them paying the same or less in the future.”

Ranald Mitchell, Director at Charwin Mortgages said, “The property market is less in survival mode than revival mode. We witnessed a remarkable resurgence in July, with a staggering increase in purchase enquiries, signalling renewed buyer enthusiasm that is beyond being a mere phase.

“As the Bank of England prepares for a possible base rate cut on Thursday, the market is poised for a potential frenzy. This anticipated move could spark continued demand, driving prices higher and shifting the advantage firmly back to sellers. With mortgage rates steadily declining, buyers are hitting the market in droves, eager to seize the opportunity. It’s good to see a once sluggish market is now brimming with energy and potential.”