"Pent-up demand, lower interest rates and sub-4% mortgage products resulted in more house hunters entering the market in September. "
- Matt Thompson, head of sales at Chestertons
UK house prices increased by 0.7% in September, resulting in the annual rate of growth rising from 2.4% in August to 3.2% in September, the fastest pace since November 2022, the latest Nationwide house price index shows.
Average prices are now around 2% below the all-time highs recorded in summer 2022.
Most regions saw a pick-up in Q3
Data for Q3 indicates that most regions saw a pickup in annual house price growth.
Northern Ireland remained the best performer by some margin, with prices up 8.6% compared with Q3 2023. Scotland saw a noticeable acceleration in annual growth to 4.3% (from 1.4% in Q2), while Wales saw a more modest 2.5% year-on-year rise, from 1.4% the previous quarter.
Across England overall, prices were up 1.9% compared with Q3 2023. Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands), continued to outperform southern England, with prices up 3.1% year-on-year. The North West was the best performing English region, with prices up 5.0% year-on-year.
Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) saw a 1.3% year-on-year rise. London remained the best performing southern region with annual price growth of 2.0%. East Anglia was the only UK region to record an annual price fall, with prices down 0.8% year-on-year.
Which property types saw the biggest price rises?
Nationwide's most recent data by property type reveals that terraced houses have seen the biggest percentage rise in prices over the last 12 months, with average prices up 3.5%. Semi-detached and flats saw increases of 2.8% and 2.7% respectively. Whilst detached houses saw more modest growth of 1.7%.
Over the longer term however, detached homes have continued to have a slight edge over other property types, most likely due to the ‘race for space’ seen during the pandemic. Since Q1 2020, the price of an average detached property increased by nearly 26%, while flats have only risen by c15% over the same period.
Robert Gardner, Nationwide's chief economist, said: “Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters. These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards."
Matt Thompson, head of sales at Chestertons, commented: “Pent-up demand, lower interest rates and sub-4% mortgage products resulted in more house hunters entering the market in September. In response to the uplift in buyer activity, and with looming changes to Capital Gains Tax in the upcoming Autumn Budget, we have also seen more sellers putting their property up for sale. We expect September’s level of market activity to continue in October but sellers will review their position following the Autumn Budget whilst some buyers await the next Bank of England announcement on interest rates in November.”
Foxtons CEO, Guy Gittins, said: “Further positive house price growth in September suggests that market momentum has continued to build and there’s no doubt that buyer activity has strengthened following the cut to interest rates seen in August.
"We anticipate that the market will now go from strength to strength as we head into the Autumn season and what is traditionally a very active period for the UK property market and we’re already seeing more enquiries made, more offers submitted and more sales agreed, all of which bodes very well for the remainder of the year and beyond.”
Tomer Aboody, director of MT Finance, added: “A strong September has seen prices increase to very close to the highest recorded levels from 2022.
"With mortgages at a more affordable levels and the Bank of England expected to reduce rates again, we are hoping for a strong final quarter, although the autumn Budget is yet to come and we have already been warned.”
