The UK housing market remains stable despite economic uncertainty and nerves about the upcoming Autumn budget.
UK house prices stood firm in September, according to the latest Nationwide House Price Index published on 1 October. Annual price growth went up by 2.2%, slightly higher than the 2.1% rise in August.
This takes the average house price to £271,995 according to the lender. On a seasonally adjusted basis, prices rose by 0.5% month-on-month, reversing the 0.1% decline seen in August.
Nationwide’s Chief Economist, Robert Gardner, said that the annual pace of house price growth was slightly stronger than in August, and that prices increased by 0.5% month on month when you factor in seasonal effects.
Mortgage approvals at pre-pandemic levels
Mortgage approvals for house purchases are holding steady at around 65,000 per month. This level is similar to the pre-pandemic average.
Despite uncertainty about the wider economy and the government’s forthcoming budget in November, the housing market remains resilient. This could be due to greater competition among lenders. Other reasons could include low unemployment levels, rising salaries and the hope that borrowing costs may ease up if the Bank of England decides to make more base rate cuts in the months ahead.
Northern Ireland showed the strongest performance, with annual house price growth up by 9.6% in the third quarter. Wales saw a slight increase to 3% in the third quarter (up from 2.6% in the second quarter), while Scotland slowed to 2.9%, compared with 4.5% last quarter.
In England, average house prices were up 3.4% year on year, with the North being the top-performing region in England, showing an increase of 5.1% year on year.
Housing market activity should improve
Nationwide says that housing activity should gradually improve in the near future, provided the broader economic recovery continues. For buyers, this could mean more competitive mortgage deals.
If you’re considering buying a property, moving home, or remortgaging, now is a good time to review your options. With mortgage approvals stable and signs that borrowing costs could soften, planning ahead could put you in a strong position.