"It’s essential to view these recent gains in context. While the typical property value has risen by around £13,000 over the past year, this increase is largely a recovery of the ground lost over the previous 12 months."
- Amanda Bryden, head of mortgages at Halifax
House prices increased by 0.3% in September, matching the rise seen in August, while annual price growth increased to 4.7% - the strongest rate since November 2022, according to the latest Halifax house price index.
The typical property now costs £293,399, the highest since June 2022. Despite this, the average amount paid by first-time buyers is now around £1,000 less than two years ago.
Regional house prices
Northern Ireland continues to record the strongest property price growth of any nation or region in the UK, rising by 9.7% on an annual basis in September.
House prices in Wales also recorded strong growth, up 4.4%, compared to the previous year, while Scotland saw a more modest rise at 2.1%.
The North West once again recorded the strongest house price growth of any region in England, up by 5.1% over the last year.
London continues to have the most expensive property prices in the UK, now averaging £539,238, up 2.6% compared to last year. However, this is still some way below the capital’s peak property price of £552,592 set in August 2022.
Amanda Bryden, head of mortgages at Halifax, said: "It’s essential to view these recent gains in context. While the typical property value has risen by around £13,000 over the past year, this increase is largely a recovery of the ground lost over the previous 12 months. Looking back two years, prices have increased by just 0.4% (£1,202).
"Market conditions have steadily improved over the summer and into early autumn. Mortgage affordability has been easing thanks to strong wage growth and falling interest rates. This has boosted confidence among potential buyers, with the number of mortgages agreed up over 40% in the last year and now at their highest level since July 2022.
“While improved mortgage affordability should continue to support buyer activity – boosted by anticipated further cuts to interest rates – housing costs remain a challenge for many. As a result we expect property price growth over the rest of this year and into next to remain modest.”
Jonathan Hopper, CEO of Garrington Property Finders, commented: “The recovery is real but not rocket-fuelled. Average property prices across the UK are back within touching distance of the all-time high that the Halifax recorded in June 2022, but the pace of progress varies widely across the UK.
“There’s a clear north-south split in England, with prices in the North West rising at double the speed of those in London. In the capital’s prime and super-prime markets, we’re seeing prices hold steady and even tick down in some areas. The Halifax’s data shows the average London home is currently worth over £13,000 less than it was in August 2022.
“The reason for this regional split is that while buyer appetite is strong, many buyers remain highly price sensitive and value is key. Prices are rising fastest in more affordable locations as buyers who are fed up with waiting seek more home for their money.
“Nevertheless the market is firmly back on track and on course to end the year on a high. The Bank of England is expected to cut interest rates at least once more, and possibly twice, before Christmas - and the prospect of cheaper mortgages and the sense that now is the time to strike before house prices climb too high has spurred many would-be buyers into action.
“Falling borrowing costs isn’t the only good news for buyers either. Recent weeks have seen a surge of properties for sale come onto the market. This is keeping price inflation in check, and means that in some areas, buyers are spoilt for choice and sellers are having to price their homes keenly to stand out in an increasingly busy market.”
Tomer Aboody, director of MT Finance, added: "Another strong month for the housing market with this level of growth is further indication of growing confidence, although it could also be seen as recovery due to the static, slow market in 2023, where prices and transactions were down.
"We are now seeing the fruits of a better economy and lower rates, with mortgage rates much more affordable than this time last year.
"With the October Budget looming, we hope that the trend continues but many fear what Rachel Reeves might bring.”
