UK house prices rise for third month running, close to record high – business live

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UK house prices have risen for the third straight month, lender Halifax reports this morning, helped by lower borrowing costs.

According to Halifax, the average house price rose by 0.3% in September to £293,399, up from £292,540 in August, which pushed the annual growth rate up to 4.7%.

This left the average price only a little short of the record high of £293,507 set in June 2022, on Halifax’s index, before the market started to slide in autumn 2022 after the mini-budget pushed up mortgage rates.

A chart showing average house prices Photograph: Halifax

Amanda Bryden, Head of Mortgages at Halifax, says improved mortgage affordability is stimulating the market.

But, she adds, it’s “essential” to view these recent gains in context.

Bryden explains:

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% (£1,202).

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% 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.”