Analysis of movement in house price indices

Each month, Halifax, Nationwide and HM Land Registry publish house price indices, tracking the movement in average house prices in the UK. Halifax and Nationwide updates are based on mortgage approvals data, while the UK HPI is a joint production by HM Land Registry, Land and Property Services Northern Ireland, ONS and Registers of Scotland.

House price indices show increases

Annual movement in UK house prices was up in August 2024, according to both Halifax and Nationwide’s indices.

Halifax reported a 4.3% annual increase in house prices, while Nationwide’s index showed an increase of 2.4% on the same period.

On a monthly basis, Halifax said prices were up by 0.3% on July 2024, while Nationwide’s index showed a 0.2% decrease.

Amanda Bryden, Head of Mortgages at Halifax, said the annual figure, the strongest rate since November 2022, was due in large part to the comparison with weaker growth last year.

She said: ‘Affordability remains a significant challenge for many potential buyers still adjusting to higher mortgage costs. However, with market activity picking up and the possibility of further interest rate reductions to come, we expect house prices to continue their modest growth through the remainder of this year.’

Nationwide’s Chief Economist, Robert Gardner, said prices are still around 3% below the all-time highs recorded in the summer of 2022.

He said: ‘Providing the economy continues to recover steadily, as we expect, housing market activity is likely to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.’

The UK HPI, with the latest data for July 2024, showed a 2.2% increase in house prices compared with July 2023, and a 0.6% increase on June 2024. As the UK HPI figures cover house sales that may have been agreed months previously, there tends to be a lag in the data.

^{Source: Halifax (Methodology), Nationwide (Methodology), UK HPI (Methodology)}

Regional data from Nationwide shows Northern Ireland and the North West saw the greatest annual increases in 2Q2024, while East Anglia and the South West had the biggest falls.

^{Source: Nationwide}

Dr David Crosthwaite, Chief Economist at BCIS, said: ‘It appears some pent-up demand is feeding through to house price growth, no doubt helped by the recent modest base rate cut as buyers adapt to what looks like being the new normal, with elevated interest rates settling at around the long-term trend of between 4% and 5%.’

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