The UK housing market has seen a modest acceleration in annual price growth.
- House prices increased by 2.9% in September, up from 2.7% in August.
- The North East experienced the highest inflation at 6.5%, while London saw a 0.5% decrease.
- Uncertainty looms as government decisions could influence future trends.
- Ongoing buyer demand may further drive prices up before 2025.
UK house prices saw an upward trend, growing by 2.9% in the year leading up to September, an increase from August’s 2.7%, according to the UK House Price Index. This steady climb has been observed since December 2023, when the rate was at -2.7%.
The North East recorded the highest inflation rate among English regions at 6.5%, significantly rising from 2.1% in August. In contrast, London experienced a decline of 0.5%, following a previous increase of 1.2% in the prior month.
On a broader scale, the figures disclosed an average price increase of 2.5% in England, bringing the average house price to £309,000. Meanwhile, Wales reported a slight rise of 0.4%, with prices reaching £217,000. Scotland and Northern Ireland saw more significant increases of 5.7% and 6.2%, respectively, with average prices at £198,000 and £191,000.
Recent economic activity has contributed to these fluctuations as buyers and sellers rushed to close deals before potential government fiscal changes. Despite the usual pre-winter dip, market activity remained robust.
Experts predict that the government’s decision not to extend stamp duty relief for first-time buyers may temporarily boost the market but could lead to longer-term challenges. With first-time buyers being crucial to new build purchases, the removal of incentives could hinder the government’s building targets.
Richard Harrison from Atom Bank pointed out that the market’s activity surge has led to increased prices, with a significant rise in property interest noted by agencies. This scenario, coupled with a limited supply, points towards further price hikes as we approach 2025.
Emma Cox of Shawbrook highlighted that the market reacted swiftly before the Chancellor’s announcement, showing a slight monthly price dip. The upcoming base rate decisions by the Bank of England, influenced by rising inflation, will be crucial to future mortgage rates.
The UK’s housing market remains dynamic, with varied regional trends and an evolving economic backdrop shaping its direction.
