UK House Prices Return to Growth Amid Broad Market Stability, Nationwide Reports
The UK property market is showing renewed strength after a summer slowdown, with house prices rising 0.5% in September, according to Nationwide Building Society. The increase lifted the average UK home price to £271,995, rebounding from a 0.1% decline in August, while the annual rate of house price growth edged up slightly to 2.2% from 2.1%.
Nationwide’s chief economist, Robert Gardner, described the market as experiencing “broad stability.” Mortgage approvals for house purchases have remained steady at around 65,000 per month, close to pre-pandemic levels, reflecting underlying support for potential buyers across the UK.
“Despite ongoing uncertainties in the global economy, conditions for UK homebuyers remain supportive,” Gardner said. “Unemployment is low, earnings are rising steadily, household balance sheets are strong, and borrowing costs are likely to ease if Bank Rate is lowered in the coming months, as expected.”
The Bank of England held interest rates at 4% last month, following five reductions since last summer. Persistent inflation, which stood at 3.8% in August, continues to influence the central bank’s cautious approach.
The upcoming Autumn Budget, set to be unveiled by Chancellor Rachel Reeves on 26 November, is already influencing buyer confidence. Speculation continues around potential tax reforms, including a new levy on homes valued over £500,000 and adjustments to stamp duty and council tax, which could shape market sentiment.
Estate agents report a mixture of cautious optimism. Amy Reynolds of Antony Roberts noted that after a surprisingly resilient summer market, many buyers are now pausing to assess the impact of the forthcoming budget. Jonathan Hopper, of Garrington Property Finders, added that the market remains in “soft landing territory,” with price rises slowing in many regions and growth remaining modest in southern England.
Regional performance highlights a diverse market:
- London: House prices nudged up 0.6% in Q3 to an average of £527,694.
- Outer South-East: Average price rose 0.3% to £337,201.
- Northern Ireland: Annual house price growth hit a UK-high of 9.6%.
- Wales: Prices grew 3%.
- Scotland: Prices increased 2.9%.
Despite a modest recovery, estate agents report that sellers are increasingly competitive, offering discounts or contributing to buyers’ stamp duty costs to close deals.
Meanwhile, leading UK housebuilders continue to feel the effects of economic uncertainty. Taylor Wimpey reported a slowdown in its net private sales rate to 0.65 per outlet per week for the nine weeks ending 28 September, down from 0.7 in the same period last year, citing the delayed UK budget as a factor impacting short-term buyer confidence.
Overall, the UK housing market is gradually stabilizing, with house prices returning to growth, supported by strong fundamentals, steady mortgage approvals, and regional variations that offer opportunities for buyers and investors alike.
