House prices rose 4.7% year-on-year, the strongest rate of annual growth recorded since November 2022, taking the average property value to £293,399.
Month-on-month, house prices increased by 0.3%, or £859 in cash terms, matching the rise recorded in August.
September’s house price rises follow news that August’s mortgage approvals for purchases reached their highest level since August 2022, as 64,900 loans were given the green light.
Making up lost ground
In Halifax’s September House Price Index, the bank said it was important to view recent price gains in context.
Amanda Bryden, head of mortgages at Halifax, said: “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.”
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Meanwhile, the average purchase price paid by first-time buyers is now around £1,000 less than two years ago.
Bryden said that property price growth over the remaining months of 2024 and into next year would remain modest as housing costs remained a challenge for many households.
Northern Ireland enjoys strongest growth
Northern Ireland continues to record the strongest house price growth of any nation or region in the UK, rising by 9.7% on an annual basis in September.
The average price of a property in Northern Ireland is now £203,593.
Wales also recorded strong growth, up 4.4%, compared to the previous year, with properties now costing an average of £224,119. Scottish house prices rose 2.1%, driving up average values to £205,718.
The North West was England’s top-performing region, recording the strongest annual house price growth of 5.1%. Average house prices in the region sit at £234,355.
London continues to have the most expensive property prices in the UK, now averaging £539,238, which is up 2.6% compared to last year. This is still some way below the capital’s peak property price of £552,592, which was set in August 2022.
Buyer confidence returning
Guy Gittens, chief executive of estate agent Foxtons, said: “After the shock interest rates rises in 2022, the market saw a very difficult 2023, and since the interest rates have now started to trickle down, we have certainly seen buyer confidence returning to the market, with new buyer numbers being well up along with viewings.
“Currently at Foxtons, our pipeline of agreed sales is sitting at the highest level since before the referendum in 2016. So, certainly, very positive news and quite a positive outlook for what may lie ahead, assuming we might see another rate drop.”
In an interview, governor Andrew Bailey said the Bank of England could become “a bit more aggressive” regarding the base rate, as long as inflation remained manageable.
Inflation, currently at 2.2%, is sitting slightly higher than the bank’s target of 2%.
