House prices rise again for six straight months - Financial experts explain what it means for you

UK house prices have risen 1.5% since July 2024, with an annual price rise of 2.8%, according to the Office for National Statistics (ONS). This marks six months in a row of year-on-year rises.

House price growth seems to be picking up the pace as we move towards 2025, with prices increasing 1.8% in the 12 months up to July 2023 before jumping to 2.3% in the 12 months before August 2024 - remaining in accordance with our house price prediction for the next five years.

According to the average house price has risen by around £8,000 on average over the last 12 months, rising to £293,000, which may come as bad news if you're looking to buy a house.

Over the past year on average, homes in England rose 2.35% to £310,000, 3.5% to £223,000 in Wales, 5.4% to £200,000 in Scotland and 6.4% to £185,000 in Northern Ireland, according to the ONS.

But what does this all mean?

What do the figures mean?

'House prices are up across the country on an annual basis, but there remain some significant regional disparities,' says Karen Noye, mortgage expert at Quilter.

‘Yorkshire and the Humber saw the greatest monthly price increase, with a rise of 2.7%, while on an annual basis the North West led the way with a 4.6% increase in house prices.

‘Prices in London have risen 1.4% in the last year, meaning the average property value in the capital now sits at £531,212 – far out of reach for the majority of first time buyers.’

But the increase in prices could reflect an increase of people returning to the housing market.

'UK house prices accelerated 2.8% in the year to August, up from July’s revised figure of 1.8% - marking six months of annual house price rises in a row as momentum returns to the market. The number of residential property transactions also rose by 5.4%,' says Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners.

'The high rate of growth comes on the back of easing inflation and lower interest rates after the Bank of England eased its restrictive monetary policy stance by pushing ahead with its first rate cut in more than four years at the start of August – a move that led to easing mortgage rates.

'Lower inflation, easing mortgage rates and the prospect of further interest rates to come have energised the UK’s residential property market of late as buyer demand and the number of new listings rapidly ramp up. Households that had parked moving decisions amid affordability concerns during the cost-of-living and cost-of-borrowing crises are now returning to the market in droves.'

How will the house price increase affect me?

'Provided further interest rate cuts do materialise this year, housing market activity is expected to continue strengthening in line with easing affordability levels,' says Alice.

'The annual rate of inflation for September came in lower than expected at 1.7%, something likely to catalyse the market even further as it raises the likelihood of interest rate cuts in both November and December.

'Back-to-back rate cuts would deliver a major boost to first-time buyers, homeowners and those looking to sell.

'For first-time buyers, lower inflation combined with slightly more competitive mortgage rates and product choice means affordability levels are improving.

'Homeowners looking to refinance can also take advantage of improving mortgage rates, though the 1.4 million borrowers emerging from fixed-rate mortgage in the next 12 months are likely to see an average jump in their monthly repayments of £150, according to recent BoE data.

'Sellers can also benefit from the easing mortgage rate environment as better deals provide more affordable options for buyers, something likely to deliver a boost to market confidence.

'Sellers do, however, need to be realistic about pricing. With more buyers in the market and more listings to choose from, sellers aiming too high could see their property sitting on the market for months.

'A glut of new homes for sale along with better borrowing conditions means buyers may have the upper hand in negotiations so finding the right balance will be key for those looking to secure a sale.'