UK House Prices Continue to Rise, Close to Record High for Third Consecutive Month
UK house prices have seen a steady increase for the third month in a row, edging closer to a record high, as reported by the UK’s largest mortgage lender. In September, the typical property value stood at £293,399, just £108 below the record set in June 2022. Compared to the previous year, house prices have surged by 4.7%, marking the fastest growth rate since November 2022.
Data from Halifax revealed a 0.3% month-on-month increase in house prices in September, aligning with the growth seen in August. The report also indicated a 4.2% rise in the average amount paid by first-time buyers over the past year, equating to £9,409 in cash terms. This uptick brings the typical first-time buyer property price to £232,769 – the highest level since May 2024, though still slightly lower than two years ago.
Amanda Bryden, head of mortgages at Halifax, emphasised the importance of contextualising these recent gains, attributing the £13,000 increase in property value over the past year to a recovery from the losses of the previous year. She highlighted improved market conditions through the summer and early autumn, with mortgage affordability benefiting from robust wage growth and declining interest rates.
Bryden noted a surge in buyer confidence, with mortgage agreements rising by over 40% in the last year to their highest level since July 2022. Despite favorable mortgage affordability likely supporting buyer activity and expected interest rate cuts, housing costs remain a hurdle for many. Bryden anticipated modest property price growth for the remainder of this year and into the next.
According to Tom Bill, head of UK residential research at Knight Frank, the correlation between mortgage rates and house prices has been evident over the past two years, indicating a low single-digit price growth for this year due to continued rate decreases. Bill identified the Budget as a source of uncertainty on the horizon.
The interactive map provided by Halifax offers an overview of average house prices and annual increases across regions based on the most recent three months of approved mortgage transactions. The current trajectory suggests a cautiously optimistic outlook for the UK housing market in the coming months.