In September, UK house prices rose by 0.7%, pushing the annual growth rate to 3.2%, marking the fastest pace since November 2022. The average house price for the month reached
£266,094. However, despite this recovery, prices remain approximately 2% below the record highs seen in the summer of 2022, according to data from Nationwide.
Recent trends suggest improving affordability for prospective buyers. "Income growth has outpaced house price growth in recent months," said Robert Gardner, Nationwide's chief economist. He attributed this improvement to falling borrowing costs and expectations that the Bank of England may further reduce interest rates in the near future. Despite a gradual increase in housing market activity, it remains below historical norms.
Data from the third quarter of 2024 shows most regions in the UK experienced a revival in annual house price growth. Northern Ireland led with a remarkable 8.6% increase compared to Q3 2023, while Scotland's annual growth jumped to 4.3% from 1.4% in the previous quarter. Wales saw a more modest rise of 2.5% year-on-year.
In England, house prices rose by 1.9% compared to the previous year, with Northern regions, including the North, North West, Yorkshire & The Humber, East Midlands, and West Midlands, outperforming the South. The North West led England with a 5% year-on-year increase. Southern England, comprising the South West, Outer South East, Outer Metropolitan, London, and East Anglia, recorded a 1.3% rise, with London leading the South at 2% annual growth. East Anglia was the only region to see a decline, with prices down 0.8% year-on-year.
Terraced houses saw the largest price increase over the past 12 months, rising 3.5%. Semi-detached homes and flats saw gains of 2.8% and 2.7%, respectively, while detached homes experienced more modest growth at 1.7%.
Gardner noted that, over the longer term, detached homes have outperformed other property types, likely due to the "race for space" during the pandemic. Since Q1 2020, the price of an average detached property has increased by nearly 26%, compared to a 15% rise for flats.