UK house prices increased by 2.4% in July, after jumping by 2.1% in June, Nationwide has revealed.

The building society’s latest house price index showed that the average property price in the UK stood at £272,664 in July, as prices increased by 0.6% month-on-month.

This followed a reduction of 0.9% in UK house prices month-on-month.

Chief economist at Nationwide, Robert Gardner, said: "Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well. Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre-pandemic average, despite the changed interest rate environment.

"After deteriorating markedly in the wake of the pandemic, housing affordability has been steadily improving, thanks to a period of strong income growth alongside more subdued house price growth and a modest fallback in mortgage rates.

"Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive."

Personal finance analyst at Bestinvest, Alice Haine, added that competition among sellers has been heating up over the summer as a result of a surge in listings.

She concluded: "Affordability is gradually improving, driven by a steady decline in mortgage rates following four interest rate cuts since August last year, with a fifth anticipated next week. At the same time, more flexible mortgage rules are easing the homeownership journey for first-time buyers and helping those refinancing larger loans to meet affordability criteria, ensuring continued access to financing.

"Affordability remains a challenge for some, however. Inflation has been creeping up in recent months putting a dent in consumer purchasing power. Higher stamp duty costs can also be prohibitive, particularly for first-time buyers who must save a large deposit and cover a heavier property tax liability.

"If the Bank of England proceeds with a fifth rate cut next week, mortgage rates may ease further, opening up the market for more buyers. The traditional summer surge in listings is another positive for buyers, who can take advantage of a wider range of homes to choose from. It is less of a boon for sellers, however, as it raises the potential for heavier negotiations on price."

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