Rate cuts to fuel house price rises, Halifax says

Lower mortgage rates and more interest rate cuts could fuel a "modest" rise in house prices for the rest of this year, Halifax has said.

The mortgage lender's prediction came after property prices increased marginally in July following a flat few months.

Halifax said recent mortgage rate drops were "encouraging" for first-time buyers, those moving along the housing ladder or those refinancing.

But it warned affordability challenges and lack of available properties still posed problems for buyers.

"Against the backdrop of lower mortgage rates and potential further [Bank of England] base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year," Amanda Bryden, head of mortgages at Halifax said.

Last week the Bank of England lowered interest rates to 5% - the first cut since the start of the pandemic in March 2020.

The Bank's rate dictates the cost of borrowing set by High Street banks and money lenders for the likes of mortgages and credit cards.

The UK's largest lender said a typical property cost £291,268 in July, up more than £2,200 compared to the previous month.