Image by kev Bourne from Pixabay
House prices are rising at their fastest pace in nearly two years, driven by lower mortgage rates, according to Nationwide. In the year to September, property prices increased by 3.2%, with Northern Ireland seeing the biggest rise. This is the fastest growth rate since November 2022.
Nationwide attributed the increase to rising incomes and mortgage rate cuts, improving affordability. The average UK home now costs £266,094, 2% lower than 2022's record highs.
Nationwide’s chief economist, Robert Gardner, said income growth is outpacing house prices, and borrowing costs have dropped due to expectations that the Bank of England will cut interest rates. Mortgage rates have fallen recently, with lenders like Barclays offering five-year fixed deals at 3.71%.
The Bank of England held rates at 5% in September, with further cuts expected. Terraced houses saw the biggest price increase (3.5%), followed by semi-detached homes and flats. Estate agents note increased home sales ahead of the upcoming Budget, where capital gains tax changes may be announced.
