UK Housing Market Sees Fastest Growth in Two Years
The UK housing market is experiencing a significant resurgence, with house prices rising at their fastest annual pace in two years. This positive trend is largely attributed to falling mortgage rates and strong wage growth, which have boosted affordability and buyer activity.
Key Highlights:
- Annual Growth: The average property price increased by 3.2% annually in September, up from 2.4% in August. This marks the fastest rate of growth since November 20221.
- Monthly Increase: On a monthly basis, house prices rose by 0.7%, surpassing expectations1.
- Current Average Price: The average UK house price now stands at £266,094, just 2% below the all-time high recorded in the summer of 20221
Factors Driving the Market:
Robert Gardner, chief economist at Nationwide, highlighted that income growth has outpaced the rise in house prices in recent months. Additionally, borrowing costs have decreased as the Bank of England continues to cut interest rates. These factors have improved affordability for prospective buyers, leading to a modest increase in market activity1.
Stephen Perkins, managing director at Yellow Brick Mortgages, described the market as “supersonic” in September, driven by ongoing rate cuts from lenders and strong wage growth. He also noted that the upcoming autumn Budget might be prompting buyers to act now to avoid potential disruptions in demand1.
Regional Performance:
- Northern Ireland: This region saw the fastest growth in house prices, with an 8.6% year-on-year increase in the three months ending September, significantly outpacing the national average of 2.5%1.
- Northern England: Continued to outperform southern England in terms of price growth1.
Positive Trends in Mortgage Approvals:
The Bank of England reported that UK mortgage approvals have risen more than expected, reaching the highest level since August 2022. Net mortgage approvals increased from 62,500 in July to 64,900 in August. Approvals for remortgaging also saw a rise, from 25,200 to 27,200 over the same period1.
Additional Positive News:
- Housing Market Revival: Recent figures show a two-year high in annual house price growth and mortgage approvals, indicating a revival in the housing market2.
- Optimism Post-Election: Optimism in the UK housing market has reached its highest level since January 2022, following the recent general election3.
- Increased Demand: The housing market experienced a surge in activity following the Bank of England’s recent interest rate cut, with a 19% jump in property enquiries4.
The UK housing market is clearly on an upward trajectory, with various factors contributing to its recovery and growth. As we move forward, it will be interesting to see how these trends evolve and what impact the autumn Budget will have on the market.
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