The average UK house price last month was just over £100 away from a record high, according to an index. The typical property value in September was £293,399, only £108 below a record high of £293,507 set in June 2022, as reported by Halifax. House prices increased by 0.3% month-on-month in September, matching the rise seen in August. Year-on-year price growth accelerated to 4.7%, up from 4.3% in August.
Amanda Bryden, head of mortgages at Halifax, stated that UK house prices rose for the third consecutive month in September, with a slight 0.3% increase, equivalent to £859 in cash terms. Annual growth reached 4.7%, the highest rate since November 2022, bringing the average property price close to £293,399, just below the record set. Bryden emphasised that while prices have increased by around £13,000 over the past year, it is mainly recovering lost ground from the previous year.
Market conditions have improved over the summer and early autumn, with mortgage affordability easing due to strong wage growth and falling interest rates. This improvement has boosted buyer confidence, reflected in over a 40% increase in agreed mortgages compared to the previous year. However, it is noted that housing costs remain challenging for many, despite the improved affordability.
The average amount paid by first-time buyers has risen by 4.2% over the past year, reaching £232,769, the highest level since May 2024. This amount is slightly lower than the average two years ago, at £233,760. Experts like Tom Bill from Knight Frank predict low single-digit price growth this year as rates continue to decrease, with uncertainty surrounding the Budget.
Various industry professionals, including Verona Frankish from Yopa and Karen Noye from Quilter, highlighted the positive impact of easing mortgage rates and buyer demand in the property market. While rates have seen improvements, they are still notably higher compared to pre-pandemic levels, making borrowing costs challenging, especially for first-time buyers.
Looking ahead, there are expectations that market activity will continue, potentially receiving a further boost if interest rates are cut by the Bank of England in November. Despite the recovery in average property prices across the UK, reaching levels close to the all-time high set in June 2022, the pace of progress varies widely across different regions, as indicated by Halifax’s regional data.