House prices increased by 0.3% in September, matching the rise seen in August, data from Halifax’s latest House Price Index has revealed.
Year-on-year prices were up 4.7%, marking the strongest rate of growth since November 2022.
A typical property costed approximately £293,399, compared to £292,540 in August.
In addition, while affordability challenges remained, the average amount paid by first-time buyers was around £1,000 less than two years ago.
Northern Ireland continued 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.
The average price of a property in Northern Ireland stood at £203,593.
House prices in Wales also recorded strong growth, up 4.4%, compared to the previous year, with properties now costing an average of £224,119.
Scotland saw a more modest rise in house prices, where a typical property now costs £205,718, 2.1% more than the year before.
The North West once again recorded the strongest house price growth of any region in England, up by 5.1% over the last year, to sit at £234,355.
London continued to have the most expensive property prices in the UK, now averaging £539,238, up 2.6% compared to last year.
This was 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: “UK house prices climbed for the third month in a row in September, with a slight increase of 0.3%, or £859 in cash terms.
“This brings the average property price up to £293,399, just shy of the record high of £293,507 set in June 2022.
“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.”
She added: “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.”
Reaction:
Nathan Emerson CEO at Propertymark:
“It is very welcome news to see yet further growth in the housing market and taking a wide-angle view of the year, there is no doubt consumers are now able to approach the buying and selling process with a far greater degree of confidence compared to the very start of the year.
“There is still further progress to be made, but with strong hints we may see further dips in the base rate before the year is out, we are seeing some lenders already confident enough to switch up their mortgage offerings which is proving very welcome news for borrows.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“Given the high costs of living, Stamp Duty and mortgages, it’s surprising that the housing market is holding up as well as it is, but in London in particular this is down to is limited supply coupled with plenty of demand.
“There is more stock and fewer applicants but the swing is unlikely to continue to put significant upwards pressure on prices.
“That would require a considerable easing of mortgage rates and an influx of new buyers.”
Mark Harris, chief executive of SPF Private Clients:
“Lenders continue to reduce their mortgage rates, which is encouraging buyers to make their move.
“The Bank of England Governor’s comments about a more aggressive approach to rate setting should feed through to even lower mortgage pricing.
“Several lenders repriced downwards last week, including HSBC, NatWest, Barclays and Santander.
“2-year fixes are now available from 3.84% while the cheapest 5-year fix is pegged at 3.68%, which will prove to be more palatable for borrowers than some of the higher rates they have been paying recently.
“This ongoing rate war among lenders is great news for borrowers as there are some really compelling deals being launched, which will go some way to helping affordability.”
Karen Noye, mortgage expert at Quilter:
“As rates have fallen from their recent peaks, potential buyers are finding themselves with more financing options helping drive up demand.
“Currently, some lenders offer deals around the 4% mark, a stark contrast to the 5% or higher rates seen in the immediate aftermath of the 2022 mini-Budget and beyond.
“This reduction in rates has enabled buyers to secure larger mortgages, making previously unaffordable properties more attainable and boosting buyer confidence.
“However, while rates are improving, they remain significantly elevated compared to pre-pandemic levels, making the cost of borrowing still out of reach for many, especially for first-time buyers.
“With the interest rate road map still, a little unclear many are facing tough decisions about whether to fix their mortgage now or opt for a tracker.
“Fixed rates, while providing stability, are much higher than they were before 2020, making tracker mortgages more appealing to those willing to tolerate some fluctuation and potentially a higher price now but with the chance of fixing when rates have dropped more.
“This has created a competitive market for lenders, with many rolling out various deals to attract new customers.
“The broader expectation is that the Bank of England may continue to adjust rates downwards.
“Even so, with the October Budget looming, any significant fiscal changes could influence mortgage affordability, leaving buyers cautious.
“But the current landscape for mortgages is helping to drive house prices up but the market remains fragile, and any economic hiccup could stall or reduce prices once again.”
Jeremy Leaf, North London estate agent and former RICS residential chairman:
“The housing market has proved remarkably resilient over recent weeks with appraisals, listings, viewings and sales agreed in our offices above last autumn’s levels.
“Confidence is key. The recent reduction in the Bank of England base rate, with expectations of more to come – perhaps even increasingly aggressively according to its Governor – is supporting the uplift in activity.
“However, lingering concerns about a ‘painful’ Budget round the corner, particularly impacting the higher end of the market, as well as improving property and mortgage choice, is keeping a lid on higher prices.”
Tomer Aboody, director of MT Finance:
“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.”
Guy Gittins, CEO of Foxtons:
“Increased mortgage market certainty is allowing UK buyers to act with greater confidence and we’ve seen the rates available on many mortgage products continue to trend downwards since a hold on the base rate in September of last year.
“Not only has this helped to accelerate the rate of house price growth being seen across the UK property market, but we’re now seeing transactional volumes climb as these sales make it over the line.
“In fact, the latest Government figures show that in August, the number of monthly transactions exceeded the 100,000 threshold for the first time since December 2022.
“A very positive sign indeed and a strong indication that the market is now returning to form.”
Verona Frankish, CEO of Yopa:
“The property market has bounced back following a period of prolonged uncertainty caused by higher interest rates and, whilst they remain considerably higher than many homebuyers will have become accustomed to in recent years, we’re now seeing buyers return with confidence following the base rate cut seen in August.”
Marc von Grundherr, director of Benham and Reeves:
“It’s clear from the latest figures that the market is making a full return to health and much of the negativity of the last few years has now been reversed, as increasing buyers interest continues to cultivate the highest rate of house price growth seen since November 2022.”
Jonathan Hopper, CEO of Garrington Property Finders:
“The recovery is real but not rocket-fuelled.
“Average property prices across the UK are back within touching distance of the all-time high 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 surging, many buyers remain highly price sensitive and strong 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.”
Tom Brown, managing director, real estate at Ingenious:
“Today’s data shows that the resilience and appeal of the UK property sector persist.
“Though we have seen higher inflation and sticky borrowing rates, we welcome the BoE’s focus on rate cutting and what will hopefully be the start of the much needed falling rate cycle.
“There’s clearly a significant and notable shortage of housing inventory across various price brackets and locations.
“Consequently, any decline in homeowner sales is likely counterbalanced by increased demand from renters and investors. This is a trend that is not going away.
“However, it’s crucial to recognise that the situation isn’t consistent nationwide or across different property pricing brackets.
“It’s helpful to delve into subsectors and regional dynamics when assessing opportunities, as a broad market view can be misleading.
“In the real estate sector, we’re seeing significant investment capital for assets for long-term rental.
“On account of their scale and buying power, these typically institutional investors face fewer disruptions than owner occupiers or small-scale buy-to-let investors.”
Nicky Stevenson, managing director at Fine & Country:
“UK house prices continued to edge higher in September — the strongest rate since November 2022 — signalling the start of the typical autumn market boost.
“Though the Bank of England held interest rates steady at its most recent meeting, it signalled that borrowing costs are gradually on the path down from their highest levels since the 2008 financial crisis. And another cut is still being predicted towards the end of this year.
“In response, lenders such as Nationwide, Halifax, and HSBC have lowered five-year fixed mortgage rates to below 4%.
“This easing of mortgage rates, along with banks increasing their lending capacity, is giving buyers renewed confidence.
“While this is positive news for homeowners, affordability challenges persist for many potential buyers still adjusting to historically higher mortgage costs.
“Despite recent signs of market stabilisation, elevated mortgage rates continue to lock many prospective buyers out of the market.
“While the average amount paid by first-time buyers is now around £1,000 less than two years ago, this demographic remains sensitive to borrowing costs.
“With market activity picking up and the possibility of further rate reductions, modest house price growth is expected to continue through the rest of 2024.
“However, this growth may be uneven, with regional variations based on local demand and economic conditions.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“Another modest month of house price growth shows that the property industry is alive and kicking in the face of continued cost-of-living challenges.
“Prices are as high as they were in 2022, when more than a year of incentives had encouraged buyers to return to the market.
“The difference between the market in 2022 and now is that interest rates are much higher, making it more difficult for buyers to keep up with mortgage payments or get a mortgage in the first place.
“Any measures introduced in the Autumn Budget to maintain stability in house price growth, while helping get more people on the property ladder would welcomed by the industry at large.
“Estate agents are still reporting healthy levels of footfall coming through the door, with demand for quality housing still high.
“Our members believe that thousands of first-time buyers are still sitting on deposits, waiting for market conditions to improve in their favour.”
