Despite a slight dip last month, house prices are showing signs of recovery. The latest figures show that the market is weathering the storm after a tricky year.

The average house price in England and Wales edged down slightly in July, by just £500, landing at £360,630. This follows several months of small increases, according to property experts e.surv.

But experts say this is just a blip. Richard Sexton, Director at e.surv, believes the worst is over: “The most negative market conditions are now well and truly behind us.”

Prices Still Higher Than This Time Last Year

While prices have dropped from their peak in October 2022, they are still higher than they were a year ago. The average price tag is now just 1.3% lower than in July 2023.

This is a significant improvement on recent months, where we saw prices tumbling by almost 4% compared to the previous year.

North Leading the Way

The North East and North West are leading the charge with the strongest price growth over the past year. The South West and Wales are also seeing positive movement.

Interestingly, London is showing signs of life after a sluggish period. For the first time in over two years, the capital actually helped to boost national price growth.

What’s Next for House Prices?

Experts are predicting a slow but steady recovery for the housing market. Rising wages and falling inflation mean mortgages should become more affordable.

The government is also taking steps to increase the number of new homes being built, though it will be a while before these hit the market.

“Wage growth and lower inflation are expected to make mortgage costs more affordable relative to incomes,” says Sexton. “On the supply side, the government’s commitment to mandatory building targets…signals a clear direction towards enhancing housing supply.”