Halifax has reported that house prices in the three months to July increased by 3.3% against the same period a year earlier with the average house price rising to hit a new record of £230,280.

On a monthly basis, prices rose by 1.4% in July, while in the latest quarter (May-July) prices were 1.3% higher than in the preceding three months (February-April 2018).

Russell Galley, managing director, Halifax, said: “House prices picked up in July, with the annual rate of growth rising from 1.8% in June to 3.3% in July, the largest increase since last November. The average house price is now £230,280, the highest on record. House prices in the three months to July were 1.3% higher than in the previous quarter, the fastest quarterly increase, again, since November.

“While the quarterly and annual rates of house price growth have improved, housing activity remains soft.  Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year.

“In contrast, the labour market remains robust, with the numbers of people in employment rising by 137,000 in the three months to May with much of the job creation driven by a rise in full-time employment. Pressures on household finances are also easing as growth in average earnings continues to rise at a faster rate than consumer prices. With regards to the recent rise in the Bank of England Base Rate, we do not anticipate that this will have a significant effect on either mortgage affordability or transaction volumes.”

Jeff Knight, marketing director for Foundation Home Loans, added: “With the Bank of England’s decision to raise interest rates for only the second time in a decade, households feeling the pinch may be concerned that this could be the beginning of a new era. That said, taking into account ongoing Brexit concerns, changes to stamp duty and higher tax impositions, for buy-to-let properties, an additional 0.25% is only part of the equation that is at play for property owners, would be property owners and landlords alike.

“Considering the differences in house price activity across the regions, it is crucial that adequacy in residential and rental property stock is addressed. Affordability is still the biggest issue to tackle, with choice and the number of uninhabited homes also needing review.”