September marks the most considerable increase in nearly two years
Property prices across the UK have surged by 3.2% year-on year in September, marking the most considerable increase in nearly two years, according to the latest data from
Nationwide.
The Building Society’s House Price Index (HPI) reports that the average house price now stands at £266,094, reflecting a 0.7% uplift from August. The annual increase is the most
substantial since November 2022, when prices grew by 4.4%.
Nationwide highlights that, despite recent gains, average prices are about 2% below the all-time highs in summer 2022. However, a combination of factors contributes to improved
affordability, with income growth outpacing house price increases and borrowing costs
easing in anticipation of potential interest rate cuts by the Bank of England in the
coming quarters.
REGIONAL VARIATIONS IN HOUSE PRICE GROWTH
In the third quarter of the year, Northern Ireland emerged as the top performer, with house
prices rising by 8.6%, bringing the average price to £196,197.
Scotland and Wales also experienced positive growth, with 4.3% and 2.5% increases,
respectively. Meanwhile, the North West recorded a 5% rise in house prices over the year to Q3, with Yorkshire and the Humber following closely with a 4.3% increase.
Conversely, London saw a more modest growth rate of 2%, with the average house price reaching £524,685. East Anglia was the only region to register a decline, with house prices
slipping by 0.8% to £270,906.
NORTHERN ENGLAND LEADS THE CHARGE
Across England, house prices rose by 1.9% compared to Q3 2023. Northern England,
comprising regions such as the North, North West, Yorkshire & The Humber, and the
Midlands, outperformed its southern counterpart with a 3.1% year-on-year increase.
In contrast, Southern England, including areas like the South West, Outer South East,
and London, experienced a 1.3% rise, with London standing out as the best-performing
southern region with a 2% growth.
One of the driving forces behind these trends is the seasonal uptick in housing market
activity, bolstered by falling mortgage rates and wages surpassing inflation. This dynamic
has instilled renewed optimism among buyers, who are now just 2% shy of
the pandemic-era pricing peaks.
ECONOMIC FACTORS FUEL BUYER ENTHUSIASM
With wages consistently outpacing house price growth, prospective buyers find it
increasingly feasible to secure necessary financing.
This financial leeway alleviates budgetary pressures and encourages potential homeowners
to consider upgrading their properties. Additionally, mortgage rates have been downward,
with the average two-year fixed rate dropping from 6.48% a year ago to 5.4%.
This combination of favourable economic factors is expected to maintain momentum in the
housing market, fostering a climate of cautious optimism among buyers and sellers alike.
Staying informed is crucial for making sound financial decisions as the market evolves.
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