UK house prices surged by 4.7% in September compared to the same month last year, marking the strongest annual growth since November 2022, according to the latest Halifax House Price Index. The upward trend signals a continued recovery in the property market, despite broader economic uncertainties.
This latest rise in house prices brings the average UK property price to £278,000, edging closer to the record highs seen in mid-2022. However, regional disparities persist, with northern regions seeing faster growth than London and the South.
Resilience Amid Uncertainty
Daniel Austin, CEO and co-founder at ASK Partners, described the upward trend as a sign of the market’s resilience. He said: “We are continuing to see a consistent month-on-month rise in house prices, which signals a potential upward trend for the remainder of the year. The market is showing strong signs of resilience, even amid broader uncertainties.”
Austin also highlighted the role that future government initiatives could play in boosting the market, particularly Labour’s potential plans to support the housing sector. “Much anticipation surrounds Labour’s plans to stimulate the housing sector, particularly regarding the construction of new homes and unlocking the planning system,” he added.
Regional Variations
While the national figures are encouraging, the recovery has not been uniform across the country. Jonathan Hopper, CEO of Garrington Property Finders, pointed to a clear north-south divide in price growth.
“Prices in the North West are rising at double the speed of those in London,” Hopper noted. “In the capital’s prime and super-prime markets, we’re seeing prices hold steady and even tick down in some areas.”
The Halifax data revealed that the average price of a London home is over £13,000 lower than it was in August 2022. Hopper attributed this to buyer price sensitivity, with stronger growth in more affordable areas where buyers can get more value for their money.
“Buyer appetite is surging, but many remain highly price-sensitive,” Hopper explained. “Prices are rising fastest in more affordable locations as buyers who are fed up with waiting seek more home for their money.”
Outlook for the Market
Looking ahead, there is optimism that the UK housing market will end the year on a high. The prospect of further interest rate cuts from the Bank of England is expected to spur more buyers into action. Hopper anticipates that borrowing costs will fall further, which could fuel additional demand in the market.
“The Bank of England is expected to cut interest rates at least once more, and possibly twice, before Christmas,” Hopper said. “The sense that now is the time to strike before house prices climb too high has spurred many would-be buyers into action.”
In addition to cheaper mortgages, buyers are benefiting from an influx of properties coming onto the market. This increased supply is helping to keep price inflation in check and offering buyers greater choice.
Investment Opportunities
In the investment world, the property sector continues to show growth potential. Austin noted that rental values have seen sustained increases, positioning real estate as a reasonably valued asset compared to gilts.
“In the realm of commercial real estate, we have seen values hit the bottom and confidence return,” Austin said. He added that ASK Partners is focusing on supporting well-capitalised borrowers looking to invest in prime locations, as opportunities for growth in property debt continue to emerge.
As the housing market regains momentum, the coming months could see further gains, particularly if government policies stimulate construction and planning processes. With interest rates likely to fall, both buyers and investors are expected to remain active, driving continued growth in the sector.
