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Nationwide House Price Index: "The UK property market went supersonic in September."

ended 30. September 2024

UK house prices rose by 0.7% in September, according to the Nationwide house price index. This saw the annual rate of growth rise from 2.4% in August to 3.2% in September, the fastest pace since November 2022 (4.4%). Average prices are now around 2% below the all-time highs recorded in summer 2022.

According to Robert Gardner, Nationwide's Chief Economist: “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. Nationwide has just published its September and Q3 house price index." Meanwhile, most regions saw a pickup in annual house price growth.

Newspage asked a selection of mortgage and property experts for their views, below.

9 responses from the Newspage community

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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Mortgage rates edging down and wage growth staying strong have boosted affordability, and that is giving a massive boost to bricks and mortar. Despite a General Election and a flat economy, demand for property has remained durable throughout the summer and September was postively stellar. Consistently falling mortgage rates in recent months have been the catalyst and that looks set to continue. Lenders fighting for market share is really stimulating demand and that is likely to carry on all the way up to Christmas. The only potential road bump is the autumn Budget.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
The UK property market went supersonic in September. Powered by ongoing rate cuts from lenders and strong wage growth, the market is really starting to fire. I suspect the autumn Budget is also causing people to act now, as it has the potential to disrupt demand.
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Chris Baldrey-Chourio
Commercial Director at Beaufort Homes
In September and throughout the third quarter as a whole, the decline in mortgage rates definitely helped boost demand, and that shows with house prices delivering their fastest annual price growth in two years. Cheaper borrowing costs will always be good for bricks and mortar. As we move into the final months of 2024, new builds may continue to perform well if mortgage rates stabilise or decline further. For now, the flexibility of new home developers and the relative scarcity of existing homes for sale continue to make new build properties an attractive option for buyers, particularly in regions with high demand for new housing stock. New build properties have outperformed the broader housing market in recent months, even as the demand for existing homes has softened. A key reason for this is that builders have been offering incentives such as upgraded amenities to attract buyers.
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Mark Eaton
COO at April Mortgages
Given the challenges the economy has faced this year, including a General Election, the UK property market has shown its usual grit and resilience. Demand was unseasonably strong during the summer months as confidence returned, partly due to consistently falling mortgage rates. Clearly, next month’s autumn Budget is looming and could bring some uncertainty. The hope is that, from a property perspective, it is relatively benign. A growing number of buyers also have one eye on the upcoming stamp duty changes, which will add quite significant amounts to many people’s transaction costs. For first-time buyers, every penny counts and the stamp duty deadline in the spring of 2025 is really now starting to feed through into demand. That could see transaction levels pick up further in the fourth quarter.
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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
This is a remarkable renaissance in the face of persistent economic uncertainty. It has defied all the gloomy predictions and there is a cautious but growing optimism among buyers and sellers alike. The combination of a competitive mortgage landscape and expectations of further interest rate cuts has created an environment ripe for increased activity. This renewed demand has been particularly evident in urban areas and among first-time buyers, benefiting from more favourable lending conditions. An increased inventory of available properties and a growing willingness among sellers to negotiate on price suggests that buyers currently hold a marginal advantage in the market. However, the Autumn Budget could prove to be the Trojan horse that finally breaches the walls of the UK's resilient property fortress, sending house prices tumbling.
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Craig Fish
Director at Lodestone Mortgages
We were already on the cusp of a sellers' market but September's data from the Nationwide may just have made it official. Buyers should get in quick to avoid that shift and the upcoming stamp duty change which will also have an impact on their pockets. The end of 2024 is shaping up to be a good one as rates continue to reduce and is definitely a positive start to the party season. Let's just hope that it doesn't turn into a horror story following the halloween Budget.
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Andrew Montlake
Managing Director at Coreco
Never bet against bricks and mortar. It keeps on going as this latest data shows. Lower borrowing costs have ignited demand over the summer months and the property market is formally back. All eyes are now on the autumn Budget and the hope is that it doesn't put us back where we started.
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John Choong
Head of Equities and Markets at Interpretiv
If history is anything to go by, the outlook for the housing market looks bright. That's because since 1992, house prices have gone up in the year after an election, 88% of the time. The only period this didn't occur was from May 2010 to May 2011, when Europe was going through its sovereign debt crisis, and the UK government had to implement austerity measures. But with Reeves ruling such measures out in her latest speech, mortgage rates coming off their highs, and real wage growth outpacing inflation as well as house price growth, this trifecta of factors is likely to push house prices up going into the winter. However, this optimism also comes with a hint of caution, as a "painful" Budget filled with tax hikes could derail further growth in the short term. This would especially be the case if CGT hikes on residential property gets pushed back to April, potentially giving landlords a window to sell their properties over the winter, which would dampen house price growth.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
"Let's wait and see what happens in the Budget". That is the main hurdle at the moment to people really committing to buying or selling property, which is a natural reaction to a large fiscal event being just around the corner. However, what may have slipped people's minds is that the current Stamp Duty levels change, for the worse, in March next year. So, unless the budget extends the current benefit, many could be paying more to HMRC by delaying a move in the hope that some gift is delivered in the budget, which is very unlikely given the downbeat tone being set. It's likely we'll see a short sharp jump upward in the market post-budget, but then the Christmas lights will switch on and suddenly all decisions are then pushed back to the New Year, and the housing market cools again.