House prices saw their fastest growth in two years last month compared with a year ago, with prices now just 2% off the record highs seen in summer 2022.
On an annual basis house prices increased by 3.2% inSeptember, according to Nationwide’s latest House Price Index, up from 2.4% the previous month. House prices climbed by 0.7% in September versus August, with the average price of a home in the UK now at £266,094.
Robert Gardner, Nationwide’s chief economist said: “Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters. These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards.”
Although the base rate remains significantly higher than we’ve seen in recent years, in an interview with the Guardian this week, the governor of the Bank of England Andrew Bailey said that the Bank could be “a bit more aggressive” on cutting interest rates provided inflation news remains positive.
Northern Ireland remains top performer
Northern Ireland continues to hold the top spot when it comes to the region with the highest price growth, with prices in the three months to September up 8.6% compared to the same period in 2023.
England saw the slowest uptick in prices out of all the countries in the UK, with prices up 1.9% in the three months to September compared to the same three months last year. Wales saw 2.5% year-on-year rise, whilst Scotland saw prices increase by 4.3%, up from 1.4% in the preceding three months.
Mr Gardner said: “Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands), continued to outperform southern England, with prices up 3.1% year-on-year. The North West was the best performing English region, with prices up 5.0% year-on-year.”
Terraced homes across the UK saw the sharpest increase in prices, with annual growth up 3.5%. This compares to 1.6% annual price growth for detached homes.
