UK house prices rose by 0.7% in September, with this uptick lifting the annual growth rate to 3.2%, the fastest pace since November 2022.
The average UK house price in September is £266,094. Despite this recovery, average prices remain approximately 2% below the all-time highs seen in the summer of 2022, according to figures from lender Nationwide.
Recent trends suggest a positive shift in affordability for potential buyers. “Income growth has continued to outpace house price growth in recent months,” Robert Gardner, Nationwide’s chief economist, said.
He attributed this improvement partly to a decline in borrowing costs amid expectations that the Bank of England will further reduce interest rates in the near future. However, while activity in the housing market is gradually increasing, it remains subdued compared to historical norms.
Data for the third quarter of 2024 reveals that most regions experienced a resurgence in annual house price growth. Northern Ireland emerged as the standout performer, with prices surging by 8.6% compared to Q3 2023. Scotland also demonstrated significant improvement, with annual growth accelerating to 4.3%, up from just 1.4% in the previous quarter. In Wales, prices recorded a more modest year-on-year increase of 2.5%.
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Overall, house prices across England rose by 1.9% compared to the same period last year, with Northern England – encompassing North, North West, Yorkshire & The Humber, East Midlands, and West Midlands – outperforming the south. The North West led the way in England, boasting a year-on-year increase of 5%.
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%. East Anglia was the only UK region to record an annual price fall, with prices down 0.8% year-on-year.
Terraced houses have seen the biggest percentage rise in prices over the last 12 months, with average prices up 3.5%, while semi-detached and flats saw increases of 2.8% and 2.7% respectively. Detached houses saw more modest growth of 1.7%.
“If we look 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. Indeed, 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,” Gardner said.
Nathan Emerson, CEO of Propertymark, said the market it at a turning point: “As 2024 has progressed, it has been extremely positive to see a firm trend of growth emerge across the year within the housing market.
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“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.”
Alice Haine, personal finance expert at Bestinvest, commented: “As more sub 4% fixed-rate mortgage deals come online, and the likelihood that rates will ease further in the next few months if the BoE pushes ahead with a second interest rate cut in November as expected, it’s no wonder movers are feeling slightly more upbeat about being able to secure the home they want.
“Market conditions may be improving enough to boost sentiment with buyer numbers up, along with the number of sales agreed and properties listed, but that won’t entirely cancel out the affordability concerns as we head into the final quarter.”
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