The average UK house price came close to reaching a record high last month as falling mortgage rates helped to boost confidence among buyers, according to the building society Halifax.
Amanda Bryden, Head of Mortgages, 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. Annual growth edged up to +4.7%, the highest rate since November 2022. 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.
Activity
“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.”
- House prices increased by +0.3% in September, matching rise seen in August
- Year-on-year prices are up +4.7%, still the strongest rate since November 2022
- Higher annual growth continues to reflect the base impact of weaker prices a year ago
- Typical property now costs £293,399 (compared to £292,540 in August), highest since June 2022
- Average amount paid by first-time buyers now around £1,000 less than two years ago
- Northern Ireland continues to record the strongest annual house price growth in the UK
First-time buyers
The average amount paid by first-time buyers has increased by +4.2% over the past year, which
equates to an extra £9,409 in cash terms. This brings the typical first-time buyer property price up to
£232,769, its highest level since May 2024.
However that’s still about £1,000 less than the average amount paid by a first-time buyer two years
ago (£233,760), a decrease of around -0.4%.
Northern Ireland continues 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 is now £203,593.
Prices
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 continues to have the most expensive property prices in the UK, now averaging £539,238, up +2.6% compared to last year. This is still some way below the capital’s peak property price of
£552,592 set in August 2022.
Halifax said that despite recent cuts in mortgage rates, “housing costs remain a challenge for many”.
The average rate on a two-year fixed rate mortgage is 5.38%, according to the financial information service Moneyfacts. It said the average for a five-year fixed deal was 5.05%.
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