House prices saw a 3.2% year-on-year growth in September, Nationwide’s latest House Price Index has revealed.
On a monthly basis, average house prices grew by 0.7%, with the average price throughout the month recorded at £266,094, compared with £265,375 in August.
On a regional level, Northern Ireland was the best performer, with prices up 8.6% in Q3.
Meanwhile, East Anglia was the weakest performing region, with prices down 0.8% over the year.
Robert Gardner, chief economist at Nationwide, said: “UK house prices increased by 0.7% in September, after taking account of seasonal effects.
“This resulted in the annual rate of growth rising from 2.4% in August to 3.2% in September, the fastest pace since November 2022 (4.4%).
“Average prices are now around 2% below the all-time highs recorded in summer 2022.”
He added: “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.”
Reaction:
Nathan Emerson, CEO of Propertymark:
“As 2024 has progressed, it has been extremely positive to see a firm trend of growth emerge across the year within the housing market.
“We have seen the economy settle down to a position that provides far greater consumer confidence and although we are still at the very start of the journey regarding base rates, we are starting to see lenders introduce improved competitive offerings when it comes to mortgage deals, which is a firm foundation for confidence and growth over the coming months.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“Competition among lenders to offer cheaper mortgage rates is boosting housing market activity and property prices.
“Many buyers were waiting for rates to come down before taking action and now that the Bank of England has made that all-important first cut, with another expected in November, this will further encourage those who may be wavering.
“The housing market appears to be on a firmer footing with buyer and seller confidence noticeably stronger.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“Plenty of new stock is coming to market, which is standard for this time of year, with well-priced properties attracting interest from buyers.
“We are agreeing a lot of sales at asking price, just under or even slightly over.”
Tomer Aboody, director of specialist lender MT Finance:
“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.”
Jeremy Leaf, North London estate agent and former RICS residential chairman:
“The market has changed and demand is improving which has coincided with lower mortgage rates and a more settled picture for inflation and politics.
“This shift has resulted in more appraisals, listings, offers and firming pricing. But with choice of properties and mortgages rising, a fear of missing out is also prevailing.
“Uncertainty remains an obstacle, particularly at the higher end, probably at least until after the Budget at the end of October.”
Guy Gittins, CEO of Foxtons:
“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.”
Ed Phillips, CEO of Lomond:
“Stability has been key to the returning health of the UK property market and this stability has been gradually building since interest rates were held this time last year.
“However, it’s clear that the first base rate reduction in four years has helped to revitalise buyer activity, with house prices rising at their fastest rate in two years.
“With market confidence now at a high, this will only help to drive further positivity as we enter into the Autumn selling season.”
Verona Frankish, CEO of Yopa:
“The current outlook is an extremely positive one when compared to just a year ago and we’ve seen considerable improvements on all fronts, with buyer demand climbing, more homes going under offer and sellers achieving stronger prices in the process.
“As a result, house prices are now just 2% off the record highs seen during the summer of 2022 and we could well see a new record set before the year is out.
“Of course, it’s important to remember that the base rate still remains significantly higher than we’ve seen in recent years and whilst buyers are returning with confidence, we’re not quite out of the woods yet with respect to transactional volumes, which still remain someway off the previous pace.”
Marc von Grundherr, director of Benham and Reeves:
“Although the new Labour Government has been quick to wage war on the nation’s landlords, it certainly seems as though the nation’s homebuyers have been left out in the cold with respect to the upcoming Autumn Statement and any positive property market initiatives.
“However, as the latest figures show, it’s far from needed and the property market has continued to prove its resilience, with house prices now increasing at their fastest rate in two years and climbing close to historic record highs.
“With both mortgage approvals and house prices increasing consistently, and with the cost of borrowing starting to ease, the expectation is that the market will continue to improve under its own head of steam and without the need of government intervention.”
Holly Tomlinson, financial planner at Quilter:
“The latest house price data from Nationwide shows that house prices saw a large 0.7% growth in September, resulting in an annual rate of 3.2% representing the fastest growth in two years.
“This follows a trend of moderate gains, even as the traditional summer lull typically cools activity.
“As economic conditions begin to stabilise, both buyers and sellers are finding that they are more compelled to get house hunting again helping to stimulate this growth in prices.
“The Bank of England’s recent move to hold the base rate steady, while not transformative to mortgage rates, does continue to provide stability to the market and will continue to help more competitive mortgage deals re-enter the market.
“Lenders are competing to attract custom, and a more stable environment is likely to mean they go further with rate cuts.
“Fixed-rate and tracker mortgage options continue to present a key decision point for many buyers.
“While fixed-rate deals provide much-needed certainty, particularly in these unpredictable times, they remain elevated compared to pre-pandemic levels with many people likely shocked when they come to remortgage.
“As a result, more people are now choosing to look at tracker mortgage deals as they bide their time before fixing later down the road, but this must be weighed against potential early repayment charges.
“The upcoming Labour budget is likely going to have a limited impact on further buoying the property market.
“With the Government primarily focused on addressing broader fiscal challenges, including a £22bn fiscal shortfall, significant housing stimulus seems unlikely at this stage.
“However, this morning’s results show that organically house prices are returning to a strong upward trajectory.”
Nicky Stevenson, managing director at Fine & Country:
“As we head into autumn, we expect the market to gain even more momentum, driven by lower interest rates, steady inflation, and an uptick in buyer demand.
“Two years after the upheaval of Liz Truss’s mini-Budget, mortgage rates have been steadily declining, drawing some hesitant buyers back into the market.
“But ongoing affordability challenges mean many are focusing on areas where they can maximise value for money.
“The Bank of England’s upcoming interest rate decision in November could further impact the market.
“Another anticipated rate cut could sustain buyer activity, maintaining the market’s upward trajectory.
“However, the upcoming October budget introduces new uncertainties, particularly with rumours of a potential increase to capital gains tax (CGT).
“This may prompt some investors and people with a second home to act quickly to finalise purchases before any tax hikes take effect.
“While the recent rise in house prices suggests a resilient market, recovery remains fragile.
“On the positive side, the combination of stabilising inflation and easing mortgage rates offers a more favourable environment for first-time buyers and those looking to move.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“The biggest surge in house price growth in two years will be met with open arms by homeowners looking to sell.
“House prices usually remain robust at this time of the year, as there is still time to buy, complete and move in before Christmas.
“The final quarter of 2024 will hopefully be more of the same, if current market conditions remain in place.
“While continued positive growth mostly benefits sellers, it brings a sense of stability that buyers will appreciate once they have signed on the dotted line and do not want their property to devalue.
“Affordability concerns still loom for first-time buyers, but as earnings are currently outpacing house price growth, this should go some way towards bridging the gap for those who are close to getting their foot on the ladder.
“In a month’s time, the new Chancellor will take to the despatch box to unveil her first budget and give the property industry a good indication of how this government will engage with it.
“The theme of the Autumn Budget will likely focus on decisions that aim to grow the economy, while spending carefully, which will in turn keep the markets stable and avoid any shock waves to ripple down to the housing market.
“We need to see a renewed push to help people own their own home and any incentives from the Government to help further that goal would be welcome by buyers and sellers alike.”
