House prices in the UK rose for the third consecutive month in September, nearing record highs.
- According to Halifax, prices increased by 0.3% in September, continuing a recovery trend seen since August.
- Over the past year, house prices have risen by 4.7%, marking the highest annual inflation rate since November 2022.
- The improving market conditions are attributed to falling interest rates and enhanced buyer confidence.
- Despite positive trends, regional disparities and affordability challenges remain evident across the UK.
House prices increased by 0.3% in September, according to data from Halifax, mirroring the rise experienced in August. This marks the third consecutive month of growth in the housing market, as prices continue their steady recovery from the previous year’s slowdown.
Over the past 12 months, house prices have surged by 4.7%, representing the strongest annual inflation rate since November 2022. The average home in the UK is currently valued at £293,399, which is only slightly below the record high achieved in June 2022.
The market recovery has been facilitated by falling interest rates and a gradual easing of borrowing costs, contributing to increased confidence among buyers. Amanda Bryden from Halifax noted, ‘While the typical property value has risen significantly over the past year, this increase primarily reflects a recovery from the downturn experienced in the preceding year.’
The regional performance of house prices exhibits significant variance. Northern Ireland experienced the fastest growth with a 9.7% increase over the past year, whereas Scotland saw a 2.1% rise. In England, the northwest reported a 5.1% increase in house prices, outpacing the 2.3% rise noted in eastern regions such as Hertfordshire and Essex. London, despite its high property values, saw a modest 2.6% rise year-on-year.
Despite the recovering market, affordability remains a pressing issue for many potential buyers, with mortgage affordability still presenting challenges, according to Bryden. The future trajectory of house prices is expected to be modest, although some experts anticipate quicker declines in interest rates could spur more significant growth.
Ashley Webb, an economist at Capital Economics, predicts that the Bank of England’s potential interest rate reductions could lead to an above-consensus 5% growth in house prices by 2025. This optimistic outlook suggests that while current economic conditions are favourable, the market’s future remains contingent on broader economic trends and policy decisions.
The UK housing market shows signs of resilience with continued price growth, although regional disparities and affordability issues persist.
