In September, UK house prices rose by 3.2% compared to the previous year, marking the fastest growth since November 2022, with terraced homes leading the increase, according to Nationwide. The rise in house prices was driven by factors such as higher incomes and falling mortgage rates, which improved affordability for buyers. Data from the Bank of England also showed mortgage approvals at their highest level in two years, reflecting increased activity in the housing market despite overall subdued conditions.
Nationwide reported that the average UK house price in September was £266,094, with a monthly rise of 0.7%. Although borrowing costs have eased, improving affordability, Nationwide’s chief economist Robert Gardner noted that housing market activity and prices remain below historical standards. Estate agents emphasized that while rising prices may encourage sellers, overpriced properties are unlikely to attract buyers, with advice to adjust prices to market levels if viewings are low.
Competition among lenders has intensified in recent months, with many offering the best mortgage deals to new buyers rather than those looking to remortgage. Nationwide has introduced a mortgage product allowing borrowers to request loans up to six times their income with a 5% deposit, though this is available only for those opting for long-term fixed-rate deals. However, despite lower interest rates, affordability remains a challenge for first-time buyers due to high deposit and repayment costs.
Terraced homes have seen the biggest price increases, up by 3.5%, while semi-detached houses, flats, and detached homes also saw more modest gains. Nationwide’s data excludes cash buyers, who make up around a third of the market, and focuses solely on mortgage-based purchases. As the housing market shows signs of recovery, with interest rates expected to drop further, some experts anticipate demand from buyers to grow in the coming months.
