House price growth at near record high in September, says Halifax | Personal Finance | Finance
The average UK house price was just over £100 away from a record high last month, according to Halifax’s recent index.
The typical property value in September hit £293,399, just £108 below a record high of £293,507 set in June 2022, Halifax said.
House prices increased by 0.3 percent month-on-month in September, matching a rise seen in August. Year-on-year price growth accelerated to 4.7 percent, up from 4.3 percent in August.
Amanda Bryden, head of mortgages at Halifax, said: “UK house prices climbed for the third month in a row in September, with a slight increase of 0.3 percent, or £859 in cash terms. Annual growth edged up to 4.7 percent, 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.”
However, Ms Bryden noted: ” 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 percent (£1,202).”
Ms Bryden continued: “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 percent 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.”
Northern Ireland continues to record the strongest property price growth of any nation or region in the UK, rising by 9.7 percent on an annual basis in September. The average price of a property in Northern Ireland is now £203,593, according to Halifax.
House prices in Wales also recorded strong growth, up 4.4 percent, compared to the previous year, with properties now costing an average of £224,119.
Scotland saw a more modest rise in house prices, where a typical property now costs £205,718, just 2.1 percent more than the year before.
In England, the North West once again recorded the strongest house price growth of any region, up by 5.1 percent over the last year, to sit at £234,355.
London continues to have the most expensive property prices in the UK, now averaging £539,238 and up 2.6 percent compared to last year. However, this is still some way below the capital’s peak property price of £552,592 set in August 2022.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “Easing mortgage rates, strong wage growth and the prospect of further interest rates to come have energised the UK’s residential property market as buyer demand and new listings rapidly ramp up.
“Households that had parked moving decisions amid affordability concerns during the era of high inflation and high interest rates are now returning to the market.”
Karen Noye, a mortgage expert at wealth manager Quilter said: “Currently, some lenders offer deals around the four percent mark, a stark contrast to the five percent or higher rates seen in the immediate aftermath of the 2022 mini-Budget and beyond.
“This reduction in rates has enabled buyers to secure larger mortgages, making previously unaffordable properties more attainable and boosting buyer confidence. However, while rates are improving, they remain significantly elevated compared to pre-pandemic levels, making the cost of borrowing still out of reach for many, especially for first-time buyers.”
Tanya Elmaz, director of intermediary sales at Together noted that the 0.3 percent rise in house prices is a “further sign” of the market’s recovery, remaining resilient even with the upcoming Autumn budget and its “accompanying uncertainty, which may upset some people’s immediate property plans”.
Ms Elmaz continued: “Indeed, activity continues to tick over and at Together we are seeing in equal measure the number of people remortgaging and purchasing property.
“This is a positive indicator of confidence in the market, with people wanting to both buy homes or raise equity by using their property as security for additional loans. This positive sentiment is also echoed in the fact that we’re only seeing small downward valuations in house prices and these are yet to impact overall activity.”
For those keen to move forward with their plans quickly, Ms Elmaz said: “Exploring the range of alternative financial products and schemes available to them is key. First-time buyers can explore the option of Shared Ownership, and for those in need of fast and flexible finance to capitalise on an opportunity, bridging loans are available.
“Consulting a professional mortgage adviser is a great way to evaluate all the options before making a final decision.”
