September has seen the fastest annual house price growth in around two years, according to an index.
London saw house prices have seen annual growth of two per cent, with an average house price of £524,685. “London remained the best performing southern region,” said Robert Gardner, Nationwide’s chief economist.
House prices across the UK increased by 0.7 per cent in September alone, Nationwide Building Society said.
This resulted in the annual price growth rate accelerating from 2.4 per cent in August to 3.2 per cent in September, the fastest pace since November 2022 — when there was a 4.4 per cent rise.
The average UK house price in September is £266,094.
“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 quarter,” explained Gardner.
“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.”
Jeremy Leaf, a north London estate agent said: “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.”
While the Bank of England is still holding the base rate at five per cent, lenders have been competing to offer interest rates below four per cent. This includes Nationwide’s own offering to first-time buyers that will allow them to borrow up to six times their salary.
“Competition among lenders to offer cheaper mortgage rates is boosting housing market activity and property prices,” said Mark Harris, chief executive of mortgage broker SPF Private Clients.
“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.”
Holly Tomlinson, a financial planner at wealth manager Quilter said: “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.”
Matt Thompson, head of sales at Chestertons, agreed that interest rates were pivotal to the housing market boost.
“Pent-up demand, lower interest rates and sub-4 per cent mortgage products resulted in more house hunters entering the market in September,” said Thompson.
“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.”
Concerns that the budget may bring a higher rate of Capital Gains Tax has spooked landlords in the capital, with one in five homes listed in inner London currently being ex-rental properties.
Property industry experts were positive about energy returning to the market, but cautioned that buyers are still sensitive to asking prices.
“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,” said Verona Frankish, chief executive of Yopa.
Marc von Grundher, director of Benham and Reeves, said: “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.”
Guy Gittins, chief executive of estate agent Foxtons said: “We’re already seeing more inquiries made, more offers submitted and more sales agreed, all of which bodes very well for the remainder of the year and beyond.”
Sarah Coles, head of personal finance, Hargreaves Lansdown said: “These aren’t runaway price rises, but they’re firmly positive, which always helps boost buyer sentiment and keep the wheels rolling on the property bandwagon.”
Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “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.”
Gardner said Nationwide’s most recent data by property type indicates terraced houses have seen the biggest percentage rise in prices over the past year, with average prices up by 3.5 per cent.
Semi-detached and flats saw increases of 2.8 per cent and 2.7 per cent respectively, whilst detached houses recorded growth of 1.7 per cent.
Gardner added: “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.”
Detached properties have increased in price by 26 per cent since the first quarter of 2020, while flats have only risen 15 per cent in price in the same time frame.
Here are average prices in the three months to September and the annual change, according to Nationwide Building Society:
Region |
Avg. house price (Q3 2024) |
Annual % changethis quarter |
Northern Ireland |
£196,197 |
8.6 % |
North West |
£215,807 |
5.0% |
Scotland |
£184,471 |
4.3% |
Yorkshire and the Humber |
£206,493 |
4.3% |
North East |
£161,066 |
3.2% |
Wales |
£207,113 |
2.5% |
London |
£524,685 |
2.0% |
Outer Metropolitan |
£424,345, |
1.9% |
East Midlands |
£232,390 |
1.8% |
West Midlands |
£243,599 |
1.0% |
South West |
£303,522 |
0.6% |
Outer South East |
£336,253 |
0.6% |
East Anglia |
£270,906 |
- 0.8% |
