UK house prices were 3.2% higher in September compared with the same month last year, according to data from Nationwide.
It’s the fastest rate of annual growth since November 2022, with terraced homes driving the increase.
Over the last 12 months the average price of a terraced house has risen by 3.5%. Semi-detached houses and flats increased by 2.8% and 2.7% respectively, while detached houses showed more modest growth of 1.7%.
Nationwide’s monthly report puts the average cost of a home across the UK at £266,094, up slightly from £265,375 in August.
“Average prices are now around 2% below the all-time highs recorded in summer 2022,” said Nationwide’s chief economist, Robert Gardner.
Gardner explained that 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 cut 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,” he said.
Separate data from the Bank of England showed that mortgage approvals have reached the highest level for two years.
A total of 64,900 mortgages for house purchases were approved in August, up from 62,500 in July.
