House prices rise more than expected in July - Halifax

House prices in the UK rose more than expected in July, with the average price hitting a new record, according to the latest data from lender Halifax.

House prices were up 1.4% on the month compared to a 0.9% jump in June, beating expectations for a 0.2% increase. June's figure was revised up from 0.3%.

On the year, house prices were 3.3% higher, up from a 1.8% increase in June and ahead of expectations for a 2.7% rise. This marked the largest increase since last November.

The average house price hit its highest level on record, at £230,280, with prices in the three months to July 1.3% firmer than in the previous quarter, versus a 0.5% decline in June.

Halifax managing director Russell Galley said: "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."

Pantheon Macroeconomics economist Samuel Tombs said the month-on-month measure of house prices should be taken with a pinch of salt, given that the index is four times as volatile as the official measure. He noted that most other indicators of house price growth remain weak and said it was unlikely that the jump in the Halifax measure in July marks a turning point for the market.

"For instance, Rightmove’s measure of online asking prices rose by just 1.4% year-over-year in July, while a net balance of just +3 surveyors reported to RICS that house prices had risen over the past three months in June," Tombs said.