According to data released by Halifax, a subsidiary of Lloyds Bank, UK house prices experienced their most significant annual increase in nearly two years during September, influenced by base effects. The house price index climbed by 4.7% on an annual basis in September, surpassing the 4.3% increase recorded in August, marking the most substantial growth since November 2022.
The ongoing higher annual growth is attributed to the baseline impact of subdued prices from the previous year, as noted by Halifax. On a month-to-month comparison, house prices maintained a steady rise, increasing by 0.3% in September, exceeding the economists' prediction of a 0.2% ascent. This represented the third consecutive month of rising prices.
The average house price has now reached GBP 293,399, up from GBP 292,540 in the preceding month, marking the highest level since June 2022. Among the different regions, Northern Ireland reported the strongest annual house price growth within the UK.
An additional detail from the data indicates that the average price paid by first-time buyers increased by 4.2% over the past year to GBP 232,769, reaching its highest point since May 2024. However, this remains approximately GBP 1,000 less than what first-time buyers were paying two years ago.
Amanda Bryden, Halifax's Head of Mortgages, commented that market conditions have shown steady improvements over the summer and into early autumn, with mortgage affordability benefiting from robust wage growth and declining interest rates.
Subsequently, confidence among prospective buyers has grown, with the number of agreed mortgages rising over 40% in the past year, reaching its peak since July 2022. "While enhanced mortgage affordability is expected to continue supporting buyer activity, bolstered by predicted further interest rate cuts, housing costs remain a significant challenge for many," stated Bryden. "Consequently, we anticipate that property price growth will remain modest through the remainder of this year and into the next."