House prices were now on track to be 2.5% higher over 2024, according to Zoopla
The average cost of a UK home stood at £266,400 in July, according to property website Zoopla, which said the price had risen 1.4% in the first seven months of the year.
This equated to an increase of £3,600 since the beginning of the year.
This is compared to a 0.1% increase for the same period in 2023. House prices were now on track to be 2.5% higher over 2024, as per Zoopla.
Buyer demand was a fifth higher compared to a year ago, and new sales agreed rose by almost a quarter.
The BoE interest rate cut at the beginning of August has not had a material impact on buyer demand, the property website added.
The BoE reduced rates from 5.25% to 5% — the first cut since March 2020. Higher interest rates dampened consumer sentiment, as it has led to higher borrowing costs, including mortgage rates.
Buyer demand dropped in summer 2023 as a result of the rise in mortgage rates, a factor in the year-on-year increase seen last month.
The supply of homes for sale currently stands at a seven-year high. Zoopla said it expected greater choice for buyers would help keep house price inflation in check over the rest of 2024 and into 2025.
Richard Donnell, executive director at Zoopla, said: Momentum in the sales market continues to build as mortgage rates drift lower and more and more sellers gain the confidence to list their home for sale.
Buyers have less purchasing power than two to three years ago and remain price sensitive meaning sellers cannot afford to get ahead of themselves on where to set the right price for their home, he added.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said there is a real risk in getting carried away and over-pricing your home.
There is so much on the market that buyers can take their pick, and at the same time, the fact prices are so high and mortgages remain relatively expensive means they face a real stretch to buy pricier homes, she added. Anything that is too expensive will be kicked to the kerb.
Across the UK, Belfast saw the largest percentage rise in house prices year-on-year in July, up 5.1% to £176,700. Manchester saw the second biggest percentage increase, rising 2% to £226,600.
