The latest index shows that house prices climbed by 0.7% in September versus the previous month.
On an annual basis they increased by 3.2%, with this annual rate of growth accelerating from 1.1% the previous month.
This marked the fastest rate of house price growth in two years, with house prices now just 2% off the record highs seen in summer 2022.
Robert Gardner, Nationwide’s Chief Economist, said, “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 historical standards.
“Our regional house price indices are produced quarterly, with data for Q3 (the three months to September) indicating that most regions saw a pickup in annual house price growth.
“Northern Ireland remained the best performer by some margin, with prices up 8.6% compared with Q3 2023. Scotland saw a noticeable acceleration in annual growth to 4.3% (from 1.4% in Q2), while Wales saw a more modest 2.5% year-on-year rise (from 1.4% the previous quarter).
“Across England overall, prices were up 1.9% compared with Q3 2023. Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands), continued to outperform southern England, with prices up 3.1% year-on-year. The North West was the best performing English region, with prices up 5.0% year-on-year.
“Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) saw a 1.3% year-on-year rise. London remained the best performing southern region with an annual price growth of 2.0%. East Anglia was the only UK region to record an annual price fall, with prices down 0.8% year-on-year.
“Our most recent data by property type reveals that terraced houses have seen the biggest percentage rise in prices over the last 12 months, with average prices up 3.5%. Semi-detached and flats saw increases of 2.8% and 2.7% respectively. Whilst detached houses saw more modest growth of 1.7%.
“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 Q1 2020, the price of an average detached property increased by nearly 26%, while flats have only risen by c15% over the same period.”
Foxtons CEO, Guy Gittins, said, “Further positive house price growth in September suggests that market momentum has continued to build and there’s no doubt that buyer activity has strengthened following the cut to interest rates seen in August.
We anticipate that the market will now go from strength to strength as we head into the Autumn season and what is traditionally a very active period for the UK property market and we’re already seeing more enquiries made, more offers submitted and more sales agreed, all of which bodes very well for the remainder of the year and beyond.”
Lomond CEO, Ed Phillips, added, “Stability has been key to the returning health of the UK property market and this stability has been gradually building since interest rates were held this time last year.
However, it’s clear that the first base rate reduction in four years has helped to revitalise buyer activity, with house prices rising at their fastest rate in two years. With market confidence now at a high, this will only help to drive further positivity as we enter into the Autumn selling season.”
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