UK house prices grow at fastest pace in two years, Nationwide says

UK house prices have grown at their fastest rate in the past two years, according to Nationwide.

The building society says house prices increased by 0.7% in September.

1

This means that the annual price growth rate accelerated from 2.4% in August to 3.2% this month.

This is the fastest pace since November 2022 when there was a 4.4% rise.

The average UK house price in September is £266,094, which is an increase from £265,375 in August.

The news follows a pretty subdued period for the property market, with wider economic factors like wage stagnation and political uncertainty hitting the market hard.

But it's a mixed picture across the UK, with most regions only seeing a fairly moderate increase in house prices.

Northern Ireland continues to be the most strongly for annual growth in the third quarter of the year, with prices up by 8.6% year-on-year, Nationwide said.

This means the average price of a property in Northern Ireland is now £196,197.

While East Anglia was the weakest performing region, with prices down by 0.8% over the year - with prices standing at £270,906.

Scotland saw a decent acceleration in annual growth to 4.3%, up from 1.4% in the second quarter.

Wales saw a more modest year-on-year rise from 1.4% in the previous quarter to 2.5%.

Overall, across England prices were up 1.9% compared with the third quarter of 2023.

Northern England - which comprises North, North West, Yorkshire and the Humber, the East Midlands and West Midlands - continued to outperform the south, with prices up 3.1% year-on-year.

Nationwide found that the North West was the best-performing English region, with prices up 5% year-on-year.

Southern England - made up of the South West, Outer South East, Outer Metropolitan, London and East Anglia regions - saw a 1.3% increase compared to last year.

While, unsurprisingly, London remained the best-performing southern region with annual price growth of 2%.

Here are average prices in the three months to September and the annual change, according to Nationwide Building Society:

• Northern Ireland - £196,197, 8.6%
• North West- £215,807, 5.0%
• Scotland - £184,471, 4.3%
• Yorkshire and the Humber - £206,493, 4.3%
• North East - £161,066, 3.2%
• Wales - £207,113, 2.5%
• London - £524,685, 2.0%
• Outer Metropolitan - £424,345, 1.9%
• East Midlands - £232,390, 1.8%
• West Midlands - £243,599, 1.0%
• South West - £303,522, 0.6%
• Outer South East - £336,253, 0.6%
• East Anglia - £270,906, minus 0.8%

Robert Gardner, Nationwide’s chief economist, said: “Average prices are now around 2% 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.

“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.”

Mr Gardner said Nationwide’s most recent data by property type indicates terraced houses have seen the biggest percentage rise in prices over the past year, with average prices up by 3.5%.

Semi-detached and flats saw increases of 2.8% and 2.7% respectively. Whilst detached houses recorded growth of 1.7%.

Mr Gardner added: “If we look over the longer term however, detached homes have continued to have a slight edge over other property types, most likely due to the ‘race for space’ seen during the pandemic.

“Indeed, since (the first quarter of) 2020, the price of an average detached property increased by nearly 26%, while flats have only risen by (around) 15% over the same period.”