Annual UK house prices up by 3.2% – Nationwide

House prices in the UK rose by 3.2% in September, compared to a year ago – the fastest annual growth in two years according to new figures from the Nationwide.

The rate of growth outstripped August’s 2.4% annual figure and brings the average cost of a UK home to £266,094. This represents a 0.7% month-on-month increase since August.

However, the rises were higher in the north than the south of England with terraced properties showing the biggest annual rise at 3.5%. The average price of a flat increased by 2.7% in September.

According to the Nationwide, higher incomes and falls in the cost of borrowing have brought a boost to the market. Figures from the Office for National Statistics reveal that disposable income rose to 10% in the second quarter of 2024, up from 8.9% three months earlier.

Bank of England data also shows a rise mortgage approvals in August at 64,900 compared to July’s 62,500 figure.

Meanwhile lenders have introduced lower mortgage rates on new products following the Bank’s decision to reduce the base rate from 5.25% to 5% in August. Nationwide, Halifax and HSBC are among those offering five-year fixes at below 4%.

Robert Gardner, Nationwide’s chief economist, said: “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 lower 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.”

Read more about this story in the Guardian.