Halifax’s latest House Price Index shows that prices have risen for the third successive month in September.
According to the bank’s data, the average house price now stands at £293,399 up 0.3% on the previous month.
The new price represents a monthly rise of 1.2% on the quarter and 4.7% up year-on-year, which represents the highest annual rate change since November 2022.
Amanda Bryden, head of mortgages for 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.”
“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.”
Jonathan Hopper, CEO of Garrington Property Finders, commented: “The recovery is real but not rocket-fuelled. Average property prices across the UK are back within touching distance of the all-time high the Halifax recorded in June 2022, but the pace of progress varies widely across the UK.” “There’s a clear north-south split in England, with prices in the North West rising at double the speed of those in London. In the capital’s prime and super-prime markets, we’re seeing prices hold steady and even tick down in some areas. The Halifax’s data shows the average London home is currently worth over £13,000 less than it was in August 2022.”
“Nevertheless the market is firmly back on track and on course to end the year on a high. The Bank of England is expected to cut interest rates at least once more, and possibly twice, before Christmas – and the prospect of cheaper mortgages and the sense that now is the time to strike before house prices climb too high has spurred many would-be buyers into action.”
“Falling borrowing costs aren’t the only good news for buyers either. Recent weeks have seen a surge of properties for sale come onto the market. This is keeping price inflation in check, and means that in some areas, buyers are spoilt for choice and sellers are having to price their homes keenly to stand out in an increasingly busy market.”
Daniel Austin, CEO and co-founder at ASK Partners, said: “We are continuing to see a consistent month-on-month rise in house prices, which signals a potential upward trend for the remainder of the year. The market is showing strong signs of resilience, even amid broader uncertainties. Much anticipation surrounds Labour’s plans to stimulate the housing sector, particularly regarding the construction of new homes and unlocking the planning system. If effective initiatives are announced in the coming months, they could provide the market with an additional boost, driving further growth and confidence in the sector.”
“In the property investment world, rent values have seen sustained growth, positioning real estate as reasonably valued in comparison to gilts and presenting growth potential. In the realm of commercial real estate, we have seen values hit the bottom and confidence return. The market has picked up with opportunistic acquisitions of prime properties in prime locations.”
“As a debt provider, we hope to support well-capitalised borrowers who understand their product and are looking at the best sites in prime locations with the potential to add to their asset value. Following this strategy, we aim to bolster developers’ initiatives with the flexible underwriting approach that is necessary for navigating a changing market. This will enable us to continue to offer opportunities for the growing number of private individuals opting to invest in property debt.”
