UK house prices surged by 0.7% in September 2024, marking a 3.2% increase over the past year – the fastest rate of growth since November 2022. According to the latest data from Nationwide, the average house price now stands at £266,094, just 2% below the record highs seen in summer 2022.
September surge driven by strong buyer demand
The property market’s momentum continued to build in September as falling mortgage rates and wages outpacing inflation brought buyers back into the market. Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, explained the dynamics behind the surge: “Buyers were back with a bang, prompting a September surge. Falling mortgage rates and wages outstripping inflation have prompted a burst of enthusiasm which has pushed prices up to within 2% of their pandemic-induced peaks.”
With average mortgage rates dropping from 5.99% in June to 5.4%, and wages rising, more buyers are feeling confident enough to re-enter the market. “Every month that wages outpace house price growth, it makes it easier for people to borrow what they need. It also opens up more wiggle room in their budgets,” added Coles.
Positive outlook for the autumn property market
Industry leaders remain optimistic as the property market enters the traditionally busy autumn season. Guy Gittins, CEO of Foxtons, highlighted the growing momentum: “Further positive house price growth in September suggests that market momentum has continued to build. We’re already seeing more enquiries, more offers submitted, and more sales agreed.”
Ed Phillips, CEO of Lomond, echoed these sentiments, attributing the market’s resurgence to stability in interest rates: “The first base rate reduction in four years has helped revitalise buyer activity, with house prices rising at their fastest rate in two years. This will only help drive further positivity as we enter into the autumn selling season.”
Long-term growth potential despite challenges
Although the market is seeing improvements, experts warn that challenges remain. Verona Frankish, CEO of Yopa, said: “While buyers are returning with confidence, we’re not quite out of the woods yet with respect to transactional volumes, which still remain some way off the previous pace.”
On the investment side, Daniel Austin, CEO and co-founder of ASK Partners, highlighted the sustained growth in rent values and the resilience of real estate compared to other investment options: “We are continuing to see a month-on-month rise in house prices, which is hopefully the sign of an upward trend developing for the rest of the year.”
Austin also noted opportunities in commercial real estate and property debt investment, particularly for well-capitalised borrowers in prime locations.
Looking ahead
As the property market continues to show resilience and growth, much of the future activity will depend on further interest rate adjustments and government policies. While the latest figures indicate strong buyer demand and rising house prices, the market will continue to navigate uncertainties, including potential shifts in government housing initiatives and the impact of the upcoming Autumn Statement. For now, the outlook remains positive as buyers and investors alike take advantage of improving conditions.
Nationwide has released its house price index for September: September records fastest annual house price growth in two years
