UK house prices have climbed for the third consecutive month in September, rising by 0.3% or £859, as falling mortgages rates boosted the property market.
According to Halifax, year-on-year, prices have surged by 4.7%, marking the strongest growth rate since November 2022.
The typical property price stands at £293,399, slightly up from £292,540 in August, and represents the highest level since June 2022. This left the average price only a little short of the record high of £293,507 set in June 2022, on Halifax’s index, before the market started to slide in autumn 2022 after the mini-budget pushed up mortgage rates.
For first-time buyers, the average amount paid is approximately £1,000 lower than it was two years ago, highlighting a shift in market dynamics.
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 £859 in cash terms. The annual growth rate has edged up to 4.7%, bringing the average property price close to the record high of £293,507 set in June 2022.”
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Bryden said these gains had to be viewed in context: “While the typical property value has risen by around £13,000 over the past year, this increase primarily represents a recovery of losses from the previous year. Over the last two years, prices have only risen by a modest 0.4% (£1,202).”
The housing market has shown signs of improvement through the summer and into early autumn. Enhanced mortgage affordability, driven by strong wage growth and declining interest rates, has bolstered confidence among prospective buyers. The number of mortgages agreed upon has surged over 40% in the past year, reaching its highest level since July 2022.
“While improved mortgage affordability is likely to support buyer activity — especially with anticipated further cuts to interest rates — housing costs remain a significant challenge for many. As a result, we expect property price growth to remain modest for the remainder of this year and into next,” Bryden added.
Northern Ireland has emerged as the standout performer in the UK property market, recording an annual growth of 9.7% in September. The average price of a home in the region stands at £203,593, an increase that makes it the strongest property price growth of any nation or region in the UK
In Wales, the property market is also recording increasing demand, with prices rising by 4.4% year-on-year. The average home in Wales is now valued at £224,119.
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Scotland has recorded a more modest increase in house prices. The typical property costs £205,718, up 2.1% from the previous year.
In England, the North West has claimed the title for the highest growth, with house prices climbing by 5.1% over the last year, bringing the average price to £234,355.
Meanwhile, London continues to command the highest property prices in the UK, with the average home now priced at £539,238, a 2.6% increase from last year. However, this figure remains below the capital’s peak of £552,592 reached in August 2022.
Nathan Emerson, CEO at Propertymark, said: “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.”
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