UK House Prices Rise 2.4% Annually Amid Improving Affordability

UK house prices increased by 0.6% month-on-month and 2.4% year-on-year in July, reflecting a recovery in the housing market following the end of the stamp duty holiday. Nationwide’s chief economist Robert Gardner highlighted that improved housing affordability, driven by strong income growth, subdued price rises, and a modest fall in mortgage rates, is supporting buyer demand despite economic uncertainties. The average UK home price rose to approximately £272,664, with the house price-to-earnings ratio falling to 5.75, its lowest level in over a decade. Mortgage approvals have also been steady, with June figures broadly in line with pre-pandemic averages, and typical five-year fixed mortgage rates around 4.3% for borrowers with a 25% deposit. Meanwhile, in Australia, national home prices reached a record high of $827,000 in July, driven by strong regional growth and expectations of interest rate cuts, despite slower monthly growth and ongoing supply constraints in housing. Regional areas like South Australia led this surge, with construction approvals also increasing, signaling potential for continued price growth.