Breaking News
Get 55% Off 0
👀 Ones to watch: The MOST undervalued shares to buy right now
See Undervalued Shares

UK house prices surge 3.2% in September, marking fastest annual growth since 2022

Published Sep 30, 2024 10:40 Updated Sep 30, 2024 11:40
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
UK house prices surge 3.2% in September, marking fastest annual growth since 2022
 
LLOY
-2.09%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
HSBA
-0.06%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NBS
0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Invezz.com - UK house prices have experienced their fastest annual growth rate in almost two years, with prices rising by 3.2% in September compared to the previous year.

This increase, driven by falling borrowing costs and growing expectations that the Bank of England will continue to lower interest rates, follows a 2.4% annual growth in August.

The average house price across the UK reached £266,094 in September, a 0.7% month-on-month rise, although prices remain 2% below the peak levels recorded during the summer of 2022.

House prices increase as borrowing costs drop

The rise in UK house prices in September can be attributed to a combination of falling borrowing costs and increased affordability.

Robert Gardner, Nationwide’s chief economist, noted that income growth has outpaced house price growth in recent months, improving affordability for prospective buyers.

He also pointed out that mortgage rates have edged lower, which is further fuelling housing demand, despite activity and house prices still being lower than historical standards.

Nationwide’s data revealed that the September growth of 3.2% is the highest annual increase since November 2022.

The average house price now sits at £266,094, with prices rising by 0.7% month-on-month.

This follows a period of rate cuts by lenders, as expectations for further reductions by the Bank of England continue to influence the mortgage market.

Northern Ireland leads with 8.6% house price increase

In terms of regional growth, Northern Ireland led the way in the third quarter of 2024 with an 8.6% year-on-year increase in house prices.

Scotland also saw strong growth, with house prices up by 4.3%, while Wales experienced a more modest rise of 2.5%.

Overall, house price growth in the north of England outpaced the south, with northern prices increasing by 3.1% year-on-year compared to just 1.3% in the south.

Terraced houses saw the largest price gains in September, with an annual increase of 3.5%, while flat prices rose by 2.7%.

Despite this, detached homes have seen the strongest long-term growth, with average prices rising nearly 26% since the first quarter of 2020, compared to a 15% increase for flats during the same period.

This reflects the post-pandemic ‘race for space’ trend, where demand for larger properties remains elevated.

Borrowing limits expand as lenders offer more favourable rates

Alongside house price growth, lenders are becoming more accommodating with their mortgage products.

Nationwide, Halifax, and HSBC (LON:HSBA) are now offering five-year fixed-rate mortgages at below 4% for the first time since early 2024.

This has opened up more opportunities for first-time buyers, particularly with Nationwide’s recent decision to offer loans at six times the annual household income, while Lloyds (LON:LLOY) and Halifax have increased their borrowing limits to 5.5 times income.

The Bank of England’s decision to hold its base rate at 5% in its latest review has added further momentum to the housing market.

The BoE has indicated that while rates are trending downward, further cuts will depend on sustained evidence that they will remain low. As borrowing costs continue to decline, house prices are expected to experience further support.

Northern housing market outpaces southern regions in 2024 growth

While house prices are rising across the UK, the north of England is seeing particularly strong performance.

In the three months to September 2024, house prices in the north grew by 3.1% year-on-year, compared to just 1.3% in the south.

This trend underscores a wider regional disparity in house price growth, with Northern Ireland and Scotland emerging as key areas of robust housing market activity.

The outlook for the UK housing market remains cautiously optimistic, as falling interest rates are expected to improve affordability further.

While house prices are still subdued compared to historic highs, recent data suggests a gradual recovery as borrowing conditions improve.

This article first appeared on Invezz.com

UK house prices surge 3.2% in September, marking fastest annual growth since 2022
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Apple
Continue with Google
or
Sign up with Email