Growth has returned to the UK housing market this month, but house prices have edged up just £300, new figures published today have shown.
Rightmove's house price index showed prices have risen 0.1 per cent so far this month, or 2.8 per cent since last July. That's a rise from June, when prices fell 0.4 per cent month-on-month, and rose a modest 1.8 per cent on the year before.
The average asking price hit £316,421 this month, up from £316,109 in June, although for first-time buyers, the figure fell 1.7 per cent month-on-month, from £196,943 in June to £196,450 this month.
Meanwhile, although house prices in London rose 1.1 per cent between June and July, and 0.9 per cent in the year to July, price growth in outer London stalled, with average asking prices sliding 0.4 per cent.
Rightmove suggested that although supply of new properties coming onto the market is low while demand is relatively strong, the amount buyers can afford is acting as a "price brake".
"Sellers should note the market remains very price-sensitive as some properties are hitting their price ceiling," said Miles Shipside, director at Rightmove.
"Buyers, many of whom are sellers too, will struggle to afford to pay much more. Wage growth is muted, there are signs that consumer credit is tightening, and at some point there will be the first rise in mortgage interest rates for a decade or more, which will come as a shock to buyers who have either forgotten or have never experienced interest rates going up as well as down.
He added: "We can see now that price rises are muted despite high housing demand, indicating we have left the stage of the cycle where prices rise."
Official data published last week showed wage growth is currently at 1.8 per cent, well below the UK's inflation figure of 2.9 per cent.