British house prices rose last month at the fastest annual pace since late 2022, data from mortgage lender Halifax showed on Friday, adding to signs of renewed momentum in the property market after a recent fall in interest rates.
House prices increased by 4.3% in August, the biggest annual gain since November 2022 - shortly after the economic agenda of former Prime Minister Liz Truss triggered a financial crisis and a spike in mortgage rates.
On a monthly basis, prices jumped by 0.3% in August from July, Halifax said. Economists polled by Reuters had mostly expected an increase of 0.2% on the month.
It marked a second month-on-month increase in house prices.
Other gauges of the housing market have also shown momentum picking up, although rival mortgage lender Nationwide reported a small month-on-month drop in house prices in August, rather than a rise.
Halifax linked increased activity in the housing market to the Bank of England's decision to cut interest rates last month to 5% from a 16-year high of 5.25%, its first reduction since March 2020.
"(With) market activity picking up and the possibility of further interest rate reductions to come, we expect house prices to continue their modest growth through the remainder of this year," Amanda Bryden, Halifax's head of mortgages, said.
The vast majority of economists polled by Reuters think the BoE will wait until November to reduce interest rates again, although financial markets currently show a one-in-four chance of a rate cut on Sept. 19.
The Labour Party, which secured a landslide win in July's election, has promised to reform Britain's planning system and it has set out mandatory targets to speed up home-building, but the shortage of supply is likely to remain a factor driving house prices for the medium term.
