July sees monthly rise in house prices as annual growth hits highest levels since 2022

This builds on a 1.5 per cent annual growth in June, with the average house price standing at £266,334 in July.

Despite property values being on the rise again, buyers are being warned against overstretching.

Sarah Coles, head of personal finance for Hargreaves Lansdown, noted that while the average two-year mortgage rate may have dropped, they're still far higher than in recent years.

"Meanwhile, average house prices are now almost back where they were at the peak of the market in 2022, so monthly mortgage payments are likely to be punishing.

"The last thing we need is to get carried away, and push ourselves into buying something we can't really afford."

However, industry experts have said the rise in house value makes for a more positive property market overall.

Nathan Emerson, CEO of Propertymark, commented: “The housing market is regaining a real sense of positivity.

“Now that inflation appears to be staying within target, it would further stimulate growth within the housing sector if the Bank of England feels confident enough to allow a slight interest rate cut when the Monetary Policy Committee meets later today.

“It has been widely anticipated that they may look to lower the base rate, and at a time when we have a new government who have committed to building near two million new homes by 2029, this combination of factors could lead to a rejuvenation for the housing sector.”

Matt Thompson, head of sales at Chestertons, added: “Despite some uncertainty over the Bank of England’s decision to cut interest rates today, July’s property market still saw an increase in buyer activity.

“This return of buyer confidence was not only boosted by the general election results but also by some lenders introducing more attractive mortgage products with sub-4 per cent rates.”

Nicky Stevenson, managing director of premium estate agency brand Fine & Country, said the latest trends in house prices mark a turning point for the property market.

“A rate cut by the Bank of England could be a potential game-changer for the property market,” she said.

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“Lower interest rates typically translate into more affordable mortgages and we’re already seeing lenders respond with more competitive deals ahead of the decision later today.

“With the combination of rising house prices, stabilised inflation, and potentially lower interest rates, this could lead to a flurry of activity in the coming months - with more properties coming to market and a potential boost in transactions.

“But while these factors may fuel increased activity, the full effects will take time to unfold.

“Increasing house supply and ongoing affordability pressures will act as a counterbalance, and help to ensure that any market growth remains sustainable in the long term.”