House prices have risen at their fastest pace in two years as easing mortgage rates shift the UK’s property market back into gear, new figures reveal.
House prices across Britain rose by 3.2 per cent year on year in September and 0.7 per cent month on month, according to Nationwide’s house price index.
“Mortgage rates edging down and wage growth staying strong have boosted affordability, and that is giving a massive boost to bricks and mortar,” Emma Jones, Managing Director at Whenthebanksaysno.co.uk, said.
“Despite a General Election and a flat economy, demand for property has remained durable throughout the summer and September was postively stellar,” she added.
Average prices are now around two per cent below the all-time highs recorded in summer 2022.
“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,” Nationwide’s chief economist Robert Gardner said.
“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,” Gardner added.
Craig Fish, Director at Lodestone Mortgages & Protection, said: “We were already on the cusp of a sellers’ market but September’s data from the Nationwide may just have made it official.”
“Buyers should get in quick to avoid that shift and the upcoming stamp duty change which will also have an impact on their pockets. The end of 2024 is shaping up to be a good one.”
Source: Nationwide
‘The only potential road bump is the autumn Budget’
Consumer confidence has dipped slightly ahead of the budget, and a particularly painful one may cause sentiment to fall even further.
“Next month’s autumn Budget is looming and could bring some uncertainty. The hope is that, from a property perspective, it is relatively benign,” Mark Eaton, COO at April Mortgages said.
Gabriel McKeown, Head of Macroeconomics at Sad Rabbit Investments, said: “This is a remarkable renaissance in the face of persistent economic uncertainty [but] the Autumn Budget could prove to be the Trojan horse that finally breaches the walls of the UK’s resilient property fortress, sending house prices tumbling.”
“Lenders fighting for market share is really stimulating demand and that is likely to carry on all the way up to Christmas… The only potential road bump is the autumn Budget,” Jones said.
However, a likely cut in the central bank interest rate in November could soften the impact.