September recorded the fastest UK annual house price growth in two years, up 3.2% according to the Nationwide House Price Index.

Northern Ireland saw even higher growth at 8.6%. The North West was the best performing English region, with prices up 5% year-on-year. London prices increased by 2% over the same period.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:

“UK house prices increased by 0.7% in September, after taking account of seasonal effects. This resulted in the annual rate of growth rising from 2.4% in August to 3.2% in September, the fastest pace since November 2022 (4.4%). Average prices are now around 2% below the all-time highs recorded in summer 2022.”

He added: “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.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, commented: “As we head into autumn, we expect the market to gain even more momentum, driven by lower interest rates, steady inflation, and an uptick in buyer demand. Mortgage rates have been steadily declining, drawing some hesitant buyers back into the market. The Bank of England’s upcoming interest rate decision in November could further impact the market. Another anticipated rate cut could sustain buyer activity, maintaining the market’s upward trajectory.”

Nikky added that rumours of a hike in Capital Gains Tax in the October Budget might encourage some investors and people with a second home to act quickly to finalise purchases before any tax hikes take effect.”

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The biggest surge in house price growth in two years will be met with open arms by homeowners looking to sell. The final quarter of 2024 will hopefully be more of the same, if current market conditions remain in place. While continued positive growth mostly benefits sellers, it brings a sense of stability that buyers will appreciate once they have signed on the dotted line and do not want their property to devalue.”

“The theme of the Autumn Budget will likely focus on decisions that aim to grow the economy, while spending carefully, which will in turn keep the markets stable and avoid any shock waves to ripple down to the housing market. We need to see a renewed push to help people own their own home and any incentives from the government to help further that goal would be welcome by buyers and sellers alike.”

Photo: Annual % change in house prices (Q3 2024).